Eastern District of Texas

BEAUMONT, Texas – An Orange, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Joshua Welch, 50, pleaded guilty on Sep. 20, 2021, to production of child pornography and was sentenced to 240 months in federal prison today by U.S. District Judge Marcia A. Crone.

“Those who choose to harm a child will quickly find themselves the number one target of law enforcement,” said U.S. Attorney Brit Featherston.  “No stone will be left un-turned to stop child predators.  Our law enforcement partners are dedicated to protecting our most precious population.  Thank you to those men and women who work tirelessly to make our community playgrounds and our virtual playgrounds a safe place for all children.”

According to information presented in court, in April 2021, federal agents in Beaumont received information from federal agents in Syracuse, NY, regarding an internet user who had uploaded images containing child pornography and sent them to another user.  An investigation had determined the initial sender of the material was in Orange, Texas.  On May 17, 2021, federal agents issued a search warrant at the residence in Orange and encountered Welch.  Welch admitted to producing the child pornography images and downloading.  He also admitted to visiting other internet websites to view images of child pornography.  Welch was indicted by a federal grand jury on June 2, 2021.

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

This case was investigated by Homeland Security Investigations and the Orange County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Rachel Grove.

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SHERMAN, Texas – A Kaufman County man and his girlfriend have been sentenced to federal prison for fraud violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Tommy Ray Williams, 44, of Terrell, pleaded guilty on August 10, 2021, to conspiracy to commit wire fraud and was sentenced to 180 months in federal prison by U.S. District Judge Amos Mazzant on March 23, 2022.  Whitney Jane Law, 33, of Point, Texas, pleaded guilty to a misprision of felony for her role in the scheme and was sentenced to 18 months in federal prison today by Judge Mazzant. 

Williams and Law were also ordered to pay restitution jointly and severally in the amount of $820,900.00 to their victims, several of whom are elderly.

“The elderly are often the target of fraud and contractor fraud is a common avenue to take advantage of our greatest generation,” said U.S. Attorney Brit Featherston.  “This is where old fashioned values come into play, watching out for our neighbors who, just maybe, are being taken advantage of.  Before hiring someone to do work around your home, check out their business reputation. The FBI and United States Attorney's Office will continue to aggressively investigate and prosecute those unethical and immoral persons that have the audacity, through fraud schemes, to take advantage of vulnerable victims, residents of our community, and the elderly.”\

“The defendants are scammers that took more than money, they stole their victim’s sense of home. Their schemes demanded payment, destroyed property and left behind worry and regret,” said Dallas FBI Special Agent in Charge Matthew J. DeSarno. “We are confident that this investigation had a significant impact for our community, and we will continue to work with our partners to seek justice for victims of fraud.”

According to information presented in court, Williams was involved in a conspiracy in which the conspirators would receive remodel referrals from a third-party company and then contact the homeowner and arrange for a site inspection.  Williams, alone or with others, would travel to the homeowner’s residence, discuss the types of remodeling work required, and provide a bid for services. On occasion Williams would have an associate of his do the preliminary site inspection and bid.  Williams would require a large amount of money before the work began and often would require more funds immediately after the work began, blaming this on costs such as materials that had to be purchased.  Williams would require that the homeowners write out checks payable to him, an associate, or to one of the business entities that they used.  After the homeowner made their initial payments, individuals would appear at the house and begin demolition work, often destroying key parts of the home such as plumbing, flooring, sheetrock, walls, and roofing, and would sometimes begin installation or construction work.  Soon after the work began, however, the work crews would stop coming to the residence and the renovation work would be left undone.  The homeowners would try to contact Williams, who would sometimes respond but eventually stopped responding, and did not return their funds.  Over the course of the scheme, more than 15 homeowners and a credit card processing company were defrauded of over $800,000.   Law was charged in an information with misprision of a felony.  The information alleges that she had actual knowledge of a commission of the felony, failed to notify authorities, and took at least one step to conceal the crime. 

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 10am-6pm Eastern Time, Monday-Friday. English, Spanish, and other languages are available.   

This case was investigated by the FBI Dallas, Frisco Resident Agency and prosecuted by the U.S. Attorney’s Office for the Eastern District of Texas.

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SHERMAN, Texas – Ten additional Texas doctors and a healthcare executive have agreed to pay a total of $1,680,430 to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department’s investigations of and litigation against other parties, announced Eastern District of Texas U.S. Attorney Brit Featherston today.

“There is nothing more paramount to justice than holding all individuals accountable for committing and profiting from healthcare fraud, no matter their station in life,” said U.S. Attorney Brit Featherston. “These additional settlements with these physicians and another healthcare executive exude our office’s continued dedication to pursuing all individuals who have tried to disguise their illegal kickback schemes under a fig-leaf of legitimacy through purported investment opportunities in order to enrich themselves at the expense of taxpayer-funded healthcare programs.”   

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlements announced today resolve allegations that ten Texas doctors violated the Anti-Kickback Statute by receiving thousands of dollars in remuneration from eight management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital d/b/a Little River Healthcare (Little River), True Health Diagnostics LLC (True Health), and/or Boston Heart Diagnostics Corporation (Boston Heart). Little River allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals. 

• Tamar Brionez, M.D., of Spring, Texas, agreed to pay $85,006 to settle allegations that from March 14, 2016 to March 16, 2017 she received kickbacks from an MSO, Tomball Medical Management, Inc., in exchange for ordering laboratory tests from Little River.

• Gary Goff, M.D., of Dallas, Texas, and two affiliated entities, Gary Goff, MD, PA and DFW Primary Medical Alliance, LLC, agreed to pay $454,088 to settle allegations that from August 5, 2015 to September 7, 2018 he and his entities received kickbacks from two MSOs, Alpha Rise Health, LLC and HALOS Clinical Management, LLC, in exchange for ordering laboratory tests from True Health and Little River.

• John Hierholzer, M.D., of San Antonio, Texas, agreed to pay $24,850 to settle allegations that from May 18, 2015 to February 12, 2016, he received kickbacks from an MSO, Alpha Rise Health, LLC, in exchange for ordering laboratory tests from Boston Heart and Little River.

• Bruce Maniet, D.O., of Bells, Texas, agreed to pay $175,436 to settle allegations that from January 18, 2016 to October 23, 2017 he received kickbacks from two MSOs, Ascend MSO of TX, LLC and Herculis MG LLC, in exchange for ordering laboratory tests from Boston Heart and Little River.

• Huy Chi Nguyen, M.D., of Arlington, Texas, agreed to pay $211,821 to settle allegations that from October 30, 2015 to December 31, 2017 he received kickbacks from (a) one MSO, Ascend MSO of TX, LLC, in exchange for ordering laboratory tests from True Health and Little River; and (b) another MSO, Geminorium MG LLC, in exchange for ordering laboratory tests from Boston Heart.

• Dung Chi Nguyen, M.D., of Arlington, Texas, agreed to pay $211,721 to settle allegations that from November 4, 2015 to December 31, 2017 he received kickbacks from (a) one MSO, Ascend MSO of TX, LLC, in exchange for ordering laboratory tests from True Health and Little River; and (b) another MSO, Geminorium MG LLC, in exchange for ordering laboratory tests from Boston Heart.

• Rakesh Patel, D.O., of Houston, Texas, agreed to pay $174,539 to settle allegations that from August 25, 2015 to April 19, 2017 he received kickbacks from an MSO, SYNRG Partners LLC, in exchange for ordering laboratory tests from True Health and Little River.

• Cuong Trinh, M.D., of Houston, Texas, agreed to pay $45,056 to settle allegations that from July 28, 2015 to August 30, 2016 she received kickbacks from an MSO, SYNRG Partners LLC, in exchange for ordering Boston Heart laboratory tests from Little River.

• Randall Walker, M.D., of Magnolia, Texas, agreed to pay $60,898 to settle allegations that from November 7, 2014 to August 28, 2015 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in exchange for ordering laboratory tests from Little River.

• Michael Whiteley, D.O., of Tomball, Texas, agreed to pay $52,015 to settle allegations that from January 5, 2015 to July 10, 2015 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in exchange for ordering laboratory tests from Little River.

 

As part of their settlements, the ten physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.

In addition, the United States announced a settlement with Brett Markowitz, the founder and CEO of Florida Rejuvenation Holdings, LLC, which operates medical practices in Tampa, Florida (collectively, the Tampa Practices). From October 18, 2016 through February 19, 2018, True Health representatives allegedly arranged for True Health to pay for each patient that physicians at the Tampa Practices referred to True Health for clinical laboratory services. True Health allegedly initially paid $25 per referral to The Blood Spot, Inc. (TBS), a company associated with and controlled in part by a True Health representative, and True Health allegedly subsequently paid $35 per referral to Express Mobile Labs, LLC (EML), a company associated with and controlled in part by Markowitz. True Health, TBS, EML, and Markowitz allegedly disguised the payments as purported processing and handling (P&H) fees. As alleged, True Health and Markowitz knew and intended that TBS and EML would pay some or all of True Health’s P&H fee payments to Markowitz, directly or indirectly, in cash or in kind. Pursuant to the alleged arrangement, True Health billed the resulting claims to Medicare and other federal healthcare programs. Under the terms of the settlement agreement, Markowitz agreed to pay $185,000 and to cooperate with the Department’s investigations of and litigation against other parties.

“Health care providers engaging in kickback schemes undermine both the public’s trust in medical institutions and the financial integrity of federal health care programs. Medical decision-making should be based on the well-being of patients, rather than the desire for ill-gotten profits,” said HHS-OIG Special Agent in Charge Miranda L. Bennett. “Working with our law enforcement partners, our agency is committed to thoroughly investigating such allegations of fraud.”

“As the investigative arm of the DoD Office of Inspector General, the Defense Criminal Investigative Service (DCIS) and our colleagues work hard to hold accountable those who undermine Federal health care programs such as TRICARE,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “Today’s announcement is another example of those efforts in making the Government, and ultimately taxpayer, as whole as possible.”

“These additional settlements send a clear message that all who would seek to defraud federal healthcare programs will be held accountable,” said Special Agent in Charge Jeffrey Breen of the Department of Veterans Affairs Office of Inspector General’s South Central Field Office. “The VA OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners to enforce the Stark Law and the Anti-Kickback Statute and act as a safeguard for taxpayer-funded veteran healthcare programs.”

The civil settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG, DCIS, and VA-OIG. As a result of its efforts, the United States has recovered over $29.6 million relating to conduct involving Boston Heart, True Health, and Little River, including False Claims Act settlements with seventeen physicians, two healthcare executives, and one laboratory. This matter and the related matters were handled by Assistant U.S. Attorneys James Gillingham, Adrian Garcia, and Betty Young, Senior Trial Counsel Christopher Terranova, and Trial Attorney Gavin Thole.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

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TYLER, Texas –A 23-year-old Russian man has been indicted in the Eastern District of Texas for offenses related to operating a cyber-criminal marketplace that sold thousands of stolen login credentials, personal identifiable information, and authentication tools, announced Eastern District of Texas U.S. Attorney Brit Featherston.

Igor Dekhtyarchuk, a resident and national of the Russian Federation (Russia), was named in an indictment returned by a federal grand jury on March 16, 2022, charging him with offenses related to operating a cyber-criminal marketplace that sold thousands of stolen login credentials, personal identifiable information, and authentication tools.

According to the indictment, Dekhtyarchuk operated Marketplace A, which claimed to have sold access to more than 48,000 compromised email accounts, more than 39,000 compromised online accounts, and averaged approximately 5,000 daily visitors.  Marketplace A specialized in the sale of unlawfully obtained access devices for compromised online payment platforms, retailers, and credit card accounts, including providing the data associated with those accounts such as names, home addresses, login credentials, and payment card data for the victims, who are the actual owners of those accounts.  Marketplace A’s business is known as a “carding shop” in the cyber-criminal world.

Dekhtyarchuk was the administrator of Marketplace A and was a Russian hacker who first appeared in hacker forums in November 2013 under the alias “floraby.”  Dekhtyarchuk began advertising the sale of compromised account data in Russian-language hacker forums in April 2018 and opened Marketplace A in May 2018.  Dekhtyarchuk immediately began advertising Marketplace A and the products it sold in May 2018. 

A potential customer who visited Marketplace A to purchase access devices for compromised accounts could select different products just as in a legitimate web store.  The options included various combinations of online and credit card accounts for the same victim.  For example, one option allowed Dekhtyarchuk’s customers to purchase the information to unlawfully access two online retail accounts plus receive credit card information for the same victim.  Some options were broken down by known account balances, which were sold at different price points. 

Dekhtyarchuk also sold the usage, in seven-day rental increments, of a program called “[Company A] Auth 1.0,” which was a downloadable software program that the customer could use to input the stolen access devices, and using the provided cookie, to access the compromised Company A accounts.

Beginning in March 2021 and ending in July 2021, the FBI through an online covert employee (OCE) made thirteen purchases of access devices from Dekhtyarchuk while accessing Marketplace A from the Eastern District of Texas.  Each purchase varied in number of accounts, ranging from three to twenty accounts, resulting in access devices purchased for a total of 131 accounts.  The OCE received the purchased access devices via link or Telegram messenger service shortly after completing each purchase.

Dekhtyarchuk has been placed on the FBI's Cyber Most Wanted List.

“This case exemplifies the need for all of us, right now, to take steps to protect our online identity, our personal data, and our monetary accounts,” said U.S. Attorney Brit Featherston.  “Cyber-criminals are lurking behind the glow of computer screens and are harming Americans.  These investigations require dedicated professionals who work tirelessly to stop thieves that steal from unknowing innocent people.  To those who dedicate their lives to stopping cyber-criminals, we thank you.”

“The cyber-criminal marketplace operated by Dekhtyarchuk promoted and facilitated the sale of compromised credentials, personally identifiable information (PII), and other sensitive financial information,” said FBI Houston Special Agent in Charge Jim Smith.  “Cyber-criminal actors behind these marketplaces go to great length to obfuscate their true identities and often utilize other sophisticated methods to further anonymize their activities.  Success in these complex investigations is dependent on teamwork and collaboration between the FBI, our international partners, and our private sector partners.  It is only through our commitment, coordinated efforts and strategic partnerships that we will be able to defeat the cyber threat.”

If convicted, Dekhtyarckuk faces up to 20 years in federal prison.  A grand jury indictment is not evidence of guilt.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case is being investigated by the Federal Bureau of Investigation Houston Cyber Task Force with the assistance of the FBI Dallas Field Office, the FBI Cyber Division, the National Cyber-Forensics & Training Alliance, the FBI Legal Attaché Riga office, and the State Police of Latvia.  This case is being prosecuted by Assistant U.S. Attorney D. Ryan Locker.

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MARSHALL, Texas – A Jefferson man has been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Beau Daniel Merryman, 21, pleaded guilty on Nov. 4, 2021, to distribution of information relating to explosives and destructive devices and was sentenced to 41 months in federal prison today by U.S. District Judge Rodney Gilstrap.

“Anyone who provides others with the technical know-how to commit acts of violence against innocent people will suffer the wrath of local, state and federal law enforcement,” said U.S. Attorney Brit Featherston.  “No stone will be left unturned to catch and prosecute such individuals.”

“The defendant threatened the safety of countless lives by sharing bomb-making information. That information and training could have caused immeasurable harm and damage if it was given to a dangerous individual,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “The FBI and our partners are committed to protecting the communities we serve. We ask the public to remain vigilant and to report suspicious activity to law enforcement.”

According to information presented in court, between September and October 2019, Merryman engaged in a series of online conversations with covert FBI employees.  During those conversations, Merryman provided detailed instructions on how to make multiple types of improvised explosive devices (IEDs), such as pipe bombs and pressure-cooker bombs.  Merryman explained how to construct the IEDs, select explosives, pack shrapnel for maximum damage, and construct fuses or detonating devices.  Merryman also directed that the IEDs be used to target federal law enforcement and critical infrastructure, such as electrical substations.

Merryman was indicted by a federal grand jury on Oct. 16, 2019. 

This case was investigated by the Federal Bureau of Investigation Tyler Resident Agency, Bureau of Alcohol Tobacco Firearms and Explosives, Cass County Sheriff’s Office, Atlanta Police Department, and Tyler Police Department.  This case was prosecuted by Assistant U.S. Attorneys Frank Coan and Ryan Locker.

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PLANO, Texas – A Pasadena, CA man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Uri Reto Seiser, 37, pleaded guilty on Sep. 3, 2021 to being a felon in possession of ammunition and was sentenced to 46 months in federal prison today by U.S. District Judge Sean D. Jordan.  Seiser was ordered not to have any contact with any victim, witness or any other individual associated with this case.  Seiser was also prohibited from entering the State of Texas without prior authorization from the U.S. Probation Office.  

“Today’s sentencing demonstrates excellent coordination between local and federal law enforcement,” said U.S. Attorney Brit Featherston.  “Patrol officers’ actions on the street likely prevented the use of violence against an innocent person.  These are the types of actions our law enforcement partners take every day to keep their communities safe, and most of the time these acts go unnoticed.”

According to information presented in court, on Nov. 14, 2020, an officer with the Corinth Police Department stopped a vehicle driven by Seiser.  Seiser stated he had just arrived from California to "reconcile" with his girlfriend, who had filed harassment charges on him.  Seiser was subsequently arrested for that outstanding harassment warrant.  During a search of his vehicle, the officer located a loaded untraceable homemade firearm, commonly known as a “ghost gun” and 49 rounds of 9mm caliber ammunition.

Evidence presented in court showed that Seiser had been threatening his ex-girlfriend for several months after she moved from California to Texas.  Seiser admitted that he assembled the weapon fully aware that he was prohibited from possessing a firearm or ammunition because he was a convicted felon.  Seiser had previously been convicted of violating a protective order, a felony offense, in Pasadena, CA, on June 20, 2019.

Seiser was indicted by a federal grand jury on Dec. 9, 2020, and charged with a federal firearms violation.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Corinth Police Department and prosecuted by Assistant U.S. Attorney Tracey Batson.

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TYLER, Texas –A 75-year-old woman and a 33-year-old man have been indicted for their roles in a cryptocurrency money laundering scheme in the Eastern District of Texas, announced U.S. Attorney Brit Featherston.

Lois Boyd, of Amelia Court House, VA, and Manik Mehtani, of McLean, VA, were named in an indictment returned by a federal grand jury, charging them with a violation of the Travel Act, money laundering, and money laundering conspiracy.

According to the indictment, Boyd and Mehtani are alleged to have conspired with others to receive victim money derived from a variety of fraud schemes and launder the proceeds through cryptocurrency.  The defendants are alleged to have routinely structured deposits in order to avoid transaction reporting requirements and to conceal the nature and source of the criminal proceeds.  The defendants allegedly exchanged the criminal proceeds for cryptocurrency and directed the cryptocurrency to wallets under the control of their foreign co-conspirators.  In August 2020, the defendants traveled to Longview, Texas, where they attempted to exchange more than $450,000 for Bitcoin.  They were temporarily detained and the money was seized.  In the course of their operation, Boyd, Mehtani, and their co-conspirators allegedly laundered more than $750,000.00.

If convicted, Boyd and Mehtani face up to 20 years in federal prison.  A grand jury indictment is not evidence of guilt.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is being investigated by the U.S. Secret Service and the U.S. Postal Inspection Service and is being prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and L. Frank Coan, Jr.

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PLANO, Texas – A Lewisville man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Aliyah George Simpson, 26, pleaded guilty on June 2, 2021, to five counts of production of child pornography and one count of transportation of child pornography and was sentenced to 540 months in federal prison today by U.S. District Judge Sean D. Jordan.

According to information presented in court, in the fall of 2020, members of HSI and the Flower Mound Police Department were investigating an individual using an online cloud storage service to transport files of child pornography.  As part of that investigation, investigators served a search warrant at Simpson's residence, during which they seized several items of digital equipment.  Through a forensic investigation, agents located a number of images and videos of a child identified as Victim 1, a minor who had not attained the age of 10-years old.  Agents also located messages with other minors in a social media application, in which Simpson induced the teens to engage in sexually explicit conduct, film that conduct, and then send the recordings to him. 

As part of his plea agreement, Simpson admitted to abusing Victim 1 on multiple occasions.  Specifically, while Victim 1 was sleeping or unconscious, Simpson sexually abused the child and recorded the abuse on cellular telephones that he owned. Simpson has also admitted to persuading, inducing, and enticing two other minors, known as Victim 2 and Victim 3, to film themselves engaged in sexually explicit conduct and to send him the recordings.  Simpson was indicted by a federal grand jury on October 15, 2020.

“This office, joined by our local, state and federal law enforcement partners, will always work tirelessly and spare no expense to detect, arrest and prosecute anyone who chooses to harm a child,” said U.S. Attorney Brit Featherston.  “In fact, to those who commit these evil acts, you are our priority.  We appreciate those dedicated men and women of law enforcement who make it their mission to protect the children of our communities.”

“HSI works relentlessly with our law enforcement partners at all levels to ensure child predators face justice for their unspeakable crimes,” said Christopher Miller, acting Special Agent in Charge HSI Dallas. “This lengthy sentence reaffirms our commitment to protecting the innocence of our most vulnerable from sexual abuse and exploitation.”

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

This case was investigated by Homeland Security Investigations and the Flower Mound Police Department and prosecuted by Assistant U.S. Attorney Marisa Miller.

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BEAUMONT, Texas – Two Houston men have been indicted for federal violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today. 

Dontae Dewey McGee, 22, and Tyrin Terelle Robinson, 21, were named in an indictment returned by a federal grand jury on March 2, 2022, charging them with theft of mail, possession of stolen mail, and aiding and abetting.  McGee and Robinson made initial appearances today before U.S. Magistrate Judge Zack Hawthorn. 

If convicted, McGee and Robinson face up to five years in federal prison.

This case is being investigated by the U.S. Postal Inspection Service and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Jonathan Lee.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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TEXARKANA, Texas – A Leesburg man has pleaded guilty to federal drug trafficking and firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Nathan Paul Hart, 34, pleaded guilty to conspiracy to possess with intent to distribute a controlled substance and possession of a firearm during a drug trafficking crime today before U.S. Magistrate Judge Caroline Craven.

According to information presented in court, Hart conspired with others to distribute methamphetamine, marijuana, and other drugs in east Texas. On Nov. 30, 2020, Hart was stopped by a Texas State Trooper in east Texas with almost two kilograms of methamphetamine, which had been imported from Mexico.  He was also in possession of a pistol.  In May 2021, while in jail, Hart directed a shipment of $22,680.00 to another person as payment for drugs from California. Hart was an organizer and leader in the drug trafficking operation, which included five or more participants and was otherwise extensive.

Hart was indicted by a federal grand jury on Aug. 28, 2021.  He faces up to life in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case is being investigated by the Mount Pleasant office of the Texas Department of Public Safety, Criminal Investigation Division with assistance from the U.S. Postal Inspection Service and the U.S. Drug Enforcement Administration.  This case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

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BEAUMONT, Texas – A Livingston man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Paul Michael Oliver, 54, pleaded guilty on Aug. 26, 2021 to possession with intent to distribute methamphetamine and was sentenced to 235 months in federal prison by U.S. District Judge Thad Heartfield today.

According to information presented in court, on Nov. 2, 2020, Oliver was arrested at his residence on an outstanding parole violation warrant.  During the arrest, Oliver was observed attempting to conceal a clear bag containing a crystal substance in a closet. A laboratory analysis determined that the substance was 684 grams of methamphetamine.  A search of the residence also produced drug paraphernalia including scales and multiple clear plastic baggies.  Oliver was indicted by a federal grand jury on Feb. 3, 2021.

The case was investigated by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Polk County Sheriff’s Office and prosecuted by Special Assistant U.S. Attorney Tommy L. Coleman.

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BEAUMONT, Texas – A Crockett man has pleaded guilty to federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Shapala Butler, 32, pleaded guilty to theft from a federal firearm licensee and being a prohibited person in possession of a firearm today before U.S. District Judge Marcia A. Crone.

According to information presented in court, on Oct. 14, 2020, the Crockett Police Department responded to a burglary at Houston County Pawn, located in Crockett.  Upon arrival, officers discovered the front door glass of the business was shattered. The officers searched the woods near the burglary and discovered eight firearms that were stolen from the pawn shop. Law enforcement was able to identify Butler as the perpetrator by using the pawn shop’s surveillance video as well as DNA evidence collected at the scene.  Butler was interviewed by a federal agent and confessed to committing the burglary. Butler further confessed to knowing he was a felon at the time of the burglary.  Butler had been convicted of burglary of a building on two prior occasions and as a convicted felon is prohibited from owning or possessing firearms or ammunition.

Butler was indicted by a federal grand jury on Dec. 15, 2021.  He faces up to 10 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Crockett Police Department and prosecuted by Assistant U.S. Attorney Donald S. Carter.

 

TEXARKANA, Texas – A Texarkana man has been indicted for federal drug trafficking and firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today. 

Darell Montrell Trotter, 32, was named in an indictment returned by a federal grand jury on Feb. 16, 2022, charging him with possessing fentanyl with intent to distribute and possessing a firearm in relation to a drug trafficking crime.  Trotter made an initial appearance today before U.S. Magistrate Judge Caroline Craven. 

According to the indictment, on Dec. 14, 2021, Trotter possessed more than 400 grams of fentanyl, which he intended to distribute to others.  On that same day, Trotter was found in possession of a pistol, a shotgun, and a rifle in furtherance of his drug trafficking. 

If convicted, Trotter faces from 15 years to life in federal prison.

This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

This case is being investigated by the U.S. Drug Enforcement Administration; the Texarkana, Texas Police Department; Texarkana, Arkansas, Police Department; the Texas Department of Public Safety; and the U.S. Postal Inspection Service.  This case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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TEXARKANA, Texas – A Bogata, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

James Thomas Tucker, 36, pleaded guilty on Oct. 20, 2021, to possession of child pornography and was sentenced to 124 months in federal prison today by U.S. District Judge Robert W. Schroeder III.

According to information presented in court, it was discovered that Tucker was using a social media messaging application to distribute images of child pornography.  A search of Tucker’s residence revealed evidence that he had been searching for child pornography.  Tucker admitted to downloading and distributing images of child pornography in exchange for more images of child pornography.  Tucker was charged in a complaint and arrested in May 2020.

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

This case was investigated by the Federal Bureau of Investigation, Bogata Police Department, and Hopkins County Sheriff’s Office.  This case was prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

 

BEAUMONT, Texas – A Port Arthur man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Troy Reese, 20, pleaded guilty on May 25, 2021 to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 135 months in federal prison on Feb. 16, 2022, by U.S. District Judge Thad Heartfield.

According to information presented in court, in June and July of 2019, traffic stops revealed a group of individuals out of Port Arthur, including Reese, were conspiring with individuals in Houston to distribute methamphetamine and China White.  China White is an extremely dangerous synthetic heroin tainted with chemicals similar to fentanyl.  The conspiracy involved using cellular applications such as CashApp to purchase narcotics and stolen or fraudulent credit cards to purchase hotel rooms and other items used in the drug trafficking conspiracy.  Reese was indicted by a federal grand jury on June 3, 2020.

The case was investigated by the Drug Enforcement Administration and the Port Arthur Police Department and prosecuted by Assistant U.S. Attorney Rachel Grove.

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TEXARKANA, Texas – A Texarkana father and son have been sentenced to federal prison for drug trafficking and firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Kelvin Lorenzo Harris, also known as Fifth Ward, 57, pleaded guilty on Sep. 7, 2021 to conspiring to distribute methamphetamine, using a firearm in relation to a drug trafficking offense and being a felon in possession of a firearm.  Harris was sentenced to 180 months in federal prison by U.S. District Judge Robert W. Schroeder, III on Feb. 15, 2022.  Markelvin Renard McHenry, also known as Black, 33, pleaded guilty to the same charges on Sep. 1, 2021, and was sentenced to 165 months in federal prison today by Judge Schroeder.

According to information presented in court, Harris and McHenry conspired to sell methamphetamine and a short-barreled shotgun in Texarkana.  Specifically, Harris displayed the sawed-off shotgun during a methamphetamine transaction in October 2020.  Several weeks later, Harris was arrested on unrelated charges.  After his arrest, Harris directed his son, McHenry, to go get the short-barreled shotgun. McHenry then sold methamphetamine and his father's shotgun, disposing of the money from the shotgun as Harris directed.  Both Harris and McHenry have been convicted of multiple felonies, including burglary of a habitation, possession of a controlled substance, unlawful possession of a firearm by a felon, and theft of a firearm.  As convicted felons, they are prohibited by federal law from owning or possessing firearms or ammunition.

Harris and McHenry were indicted by a federal grand jury on April 22, 2021, and charged with federal drug trafficking and firearms violations.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Texarkana, Texas Police Department and prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

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BEAUMONT, Texas – A Beaumont man has been convicted of federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Kenderious DaShawn Coleman, 20, pleaded guilty to Hobbs Act robbery and brandishing a firearm during a crime of violence today before U.S. Magistrate Judge Christine Stetson.

According to court documents, on September 10, 2021, Coleman committed the armed robbery of a Dollar General store in Beaumont.  Coleman was brandishing a firearm inside the store while demanding money from a store clerk. During the robbery, Coleman struck a store employee in the face with the pistol he was carrying, before making off with approximately $1500 from the store safe.  Coleman was arrested nearby a short time later with the pistol and stolen money on him.

Coleman was indicted by a federal grand jury on October 6, 2021.  He faces up to 20 years in federal prison on the armed robbery charge and an additional 7 years imprisonment for brandishing a firearm during the commission of that crime.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Beaumont Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

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BEAUMONT, Texas – A Beaumont woman has been sentenced to federal prison for firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Amber Dawn LeBlanc, 39, pleaded guilty on October 5, 2021, to possession of a stolen firearm and was sentenced to 120 months in federal prison today by U.S. District Judge Marcia A. Crone.

According to information presented in court, on May 18, 2020, law enforcement officers responded to a residential burglary in process in Beaumont.  LeBlanc was in the residence when the homeowners came home but fled before police arrived.  The homeowners were able to describe LeBlanc to the officers and she was located underneath a house in the neighborhood.  The homeowners found a bag left behind by LeBlanc in the residence which included a firearm.  The firearm had been reported stolen by an acquaintance of LeBlanc.  Further investigation revealed LeBlanc has six prior felonies and is prohibited by federal law from owning or possessing firearms or ammunition. 

LeBlanc was indicted by a federal grand jury on October 8, 2020 and charged with federal firearms violations.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Rachel Grove.

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BEAUMONT, Texas – A Beaumont man has been sentenced to federal prison for drug trafficking and firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Avery L. Mims, 36, pleaded guilty on August 2, 2021, to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime and was sentenced to 84 months in federal prison today by U.S. District Judge Marcia A. Crone.

According to information presented in court, on March 19, 2020, during a search of a vehicle Mims was driving, law enforcement officers located 14 grams of methamphetamine, 7 grams of cocaine, Xanax tablets, marijuana, and ecstasy tablets.  Officers also discovered items indicative of drug trafficking, such as digital scales and approximately $1000 in various small denominations.  Officers also located a firearm in close proximity to the drugs.  After the March 19, 2020, encounter, a federal indictment and arrest warrant was issued for Mims.  When the arrest warrant was executed, Mims was found in possession of a backpack containing approximately 60 grams of methamphetamine, crack cocaine, various tablets, and a firearm. 

Mims was indicted by a federal grand jury on February 3, 2021 and charged with federal drug trafficking and firearms violations.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Russell James.

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BEAUMONT, Texas – A Beaumont man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Tywayne Marquis Parker, 26, pleaded guilty to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime today before U.S. District Judge Marcia Crone.

According to information presented in court, on June 21, 2021, Parker was stopped in Beaumont for a traffic violation.  A search of the vehicle revealed a firearm on the driver’s floorboard, and approximately 100 grams of pills containing methamphetamine.  Officers also found a large amount of cash in varying denominations and other evidence of drug trafficking.

Parker was indicted by a federal grand jury on October 6, 2021.  He faces up to life in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Russell James.

 

BEAUMONT, Texas – A federal grand jury in the Eastern District of Texas has returned an indictment charging seven individuals with various federal violations related to a complex international drug trafficking conspiracy, announced U.S. Attorney, Brit Featherston today.

Alberto Garcia Bonilla, 52, Yimminson Caicedo Diaz, 27, Edwin Jose Pereira Arroyo, 26, Jaime Vivanco Cuellar, 39, Carlos Vicente Guagua Vasquez, 20, John Jairo Morales Parraga, 23, and Jonny Javier Cuero Sinisterra, 43, of Colombia & Ecuador; were named in an indictment charging them with conspiracy to possess with the intent to distribute cocaine while on board a vessel subject to the jurisdiction of the United States. The indictment details approximately $60 million in alleged criminal activity since 2021. The one-count indictment was returned by a federal grand jury earlier this week.

According to the indictment and other court documents, on December 26, 2021, two vessels containing cocaine were reported by the Colombian National Police as having departed Tumaco, Colombia. On December 27, 2021, the El Salvadoran Navy interdicted both vessels and seized a combined 4,186 kilograms of cocaine.

If convicted, the defendants face a minimum of ten years and up to life in federal prison, a fine of up to $10 million, and forfeiture of $60,152,300.00 in U.S. currency.

This case is being investigated by the Galveston Division of the Drug Enforcement Administration. The case is being prosecuted by Assistant U.S. Attorney Christopher Rapp.

An indictment is not evidence of guilt.

All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

BEAUMONT, Texas – A federal grand jury in Beaumont has returned a three-count indictment charging a Florida resident, along with nine other individuals, in a drug trafficking conspiracy in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

The indictment charges Adam P. Runsdorf, 56, of Boca Raton, Florida, with conspiracy, trafficking in drugs with a counterfeit mark, and money laundering conspiracy. According to the indictment, Runsdorf is the owner and president of Woodfield Pharmaceutical LLC, a pharmaceutical business based in Boca Raton, Florida, with a manufacturing facility in Houston, Texas.

Runsdorf was arrested in Boca Raton on Jan. 14, 2022, pursuant to a criminal complaint alleging the same charges.  Runsdorf joins nine other defendants in an existing indictment that was returned on Nov. 3, 2021.  

The nine Texas individuals who have already been arrested on the indictment are:

• Tunji Campbell, a/k/a Mike, 43, of Webster;
• Byron A. Marshall, a/k/a Robert Griffin, a/k/a Dr. Griffin, 43, of Houston;
• Cheryl A. Anderson, 43, of League City;
• Ashley A. Rhea, a/k/a Ashley A. Johnson, 35, of Houston;
• Chauntell D. Brown, a/k/a Juan Brown, 49, of Manvel;
• Willis Reed, 60, of Richmond;
• Kalpen D. Patel, 36, of Richmond;
• Jonathan R. Shaver, 35, of Richmond; and
• Gina Acosta, 40, of Fresno.

According to the indictment, from April 2014 until August 2021, the defendants conspired to traffic misbranded and counterfeit drugs, specifically promethazine-codeine cough syrup.  The indictment alleges the conspiracy resulted in approximately $52,736,000 in drug trafficking proceeds.    

If convicted, the defendants face up to 20 years in federal prison.

This case is being investigated by the Drug Enforcement Administration, U.S. Food and Drug Administration Office of Criminal Investigations, Federal Bureau of Investigation, U.S. Marshals Service, Houston Police Department, Galveston Police Department, Galveston County Sheriff’s Office, Dickinson Police Department, League City Police Department, Pearland Police Department, Pasadena Police Department, Texas City Police Department, Harris County Precinct #2, Brazoria County Sheriff’s Office, Fort Bend County Sheriff’s Office, Liberty County Sheriff’s Office, and the Texas National Guard.  This case is being prosecuted by Assistant U.S. Attorneys John B. Ross and Jonathan C. Lee.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

TYLER, Texas – A federal grand jury has returned a 33-count indictment charging a Tyler man for fraud schemes in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today. 

Derek Robert Hamm, 38, was named in an indictment returned by a federal grand jury in Tyler charging him with wire fraud, money laundering, violations of the Stolen Valor Act, using a fraudulent military discharge certificate, and being a felon in possession of firearms and ammunition.  The Stolen Valor Act of 2013 makes it illegal to fraudulently wear medals, embellish rank, or make false claims of military service to obtain money, employment, property, or some other tangible benefit.

According to the indictment, Hamm held himself out to be a former member of the Army Special Forces who had served multiple tours of duty in Iraq, Afghanistan, and other countries.  He claimed to have been awarded a Purple Heart, a Silver Star, and a Bronze Star for his service.  In reality, Hamm received none of those awards.  Hamm also falsely claimed to be related to Harold Hamm, the billionaire oilman in Oklahoma, which he claimed gave him access to financial resources and oil industry expertise.

The indictment alleges that Hamm’s persona of being a wealthy war hero helped him create an extensive network of friends who introduced him to potential investors. Hamm then defrauded those investors in schemes related to the oil and gas drilling industry.  Hamm did not invest funds as promised.  Instead, once Hamm received investors’ funds, he spent the money on lavish personal gifts, including nearly $500,000 on jewelry and vehicles for himself and his family. 

The indictment also alleges that Hamm was a prohibited person in possession of firearms and ammunition.  Hamm was convicted in Smith County in 2020 for theft of property, a state felony.  As a felon, Hamm is prohibited by federal law from owning or possessing firearms or ammunition. Hamm was also convicted in 2005 for assault of a family member, a domestic violence misdemeanor under state law.  According to federal law, Hamm is also prohibited from possessing firearms or ammunition due to his domestic violence conviction.

If convicted, Hamm faces up to twenty years in federal prison.

If you or someone you know has been a victim of Derek Robert Hamm, please contact the Federal Bureau of Investigation at 903-594-3503.  Derek Robert Hamm is also known as D. Wayne Hamm II, Wayne Hamm, D. Wayne H., DW Hamm, and RD Hamm.

This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

This case is being investigated by the Federal Bureau of Investigation’s Tyler Field Office, with assistance from the Tyler Police Department, the Smith County Sheriff’s Office, the Phoenix Arizona Police Department, Smith County Adult Probation, the Texas Railroad Commission-Enforcement Division, Department of Veteran’s Affairs-Office of Inspector General, Texas Comptroller of Public Accounts-Criminal Investigation Division, and the United States Special Operations Command. This case is being prosecuted by Assistant U.S. Attorneys Robert Austin Wells and Ryan Locker.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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SHERMAN, Texas – Seven Texas doctors and a hospital executive have agreed to pay a total of $1,106,449 to resolve False Claims Act allegations involving illegal remuneration in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department’s investigations of and litigation against other parties, announced Eastern District of Texas U.S. Attorney Brit Featherston today.

“Paying kickbacks to physicians distorts the medical decision-making process, corrupts our healthcare system, and increases the cost of healthcare funded by the taxpayer,” said U.S. Attorney Brit Featherston. “Laboratories, marketers, and physicians cannot immunize their conduct by attempting to  disguise the kickbacks as some sort of investment arrangement. Our office is committed to looking through the disguise and putting an end to any arrangement where the purpose is to improperly influence medical decision making through the payment of kickbacks.”   

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory.  The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlements announced today resolves allegations that seven Texas doctors received thousands of dollars in illegal remuneration from eight management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital d/b/a Little River Healthcare (Little River), True Health Diagnostics LLC (True Health), and Boston Heart Diagnostics Corporation (Boston Heart). Little River allegedly funded the illegal remuneration to the doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals.  The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals. 

• Jaspaul Bhangoo, M.D., of Denton, Texas, agreed to pay $125,625 to settle allegations that (a) True Health paid him kickbacks from January 1, 2015 to December 1, 2015; and (b) True Health referred him to an MSO, established by Little River marketers, which paid him MSO kickbacks from June 14, 2016 to September 16, 2016.

• Robert Megna, D.O., of Ferris, Texas, agreed to pay $232,000 to settle allegations that from February 2, 2016 to December 31, 2017 he received kickbacks from (a) one MSO, Ascend MSO of TX, LLC, in exchange for ordering Boston Heart laboratory tests from Little River; and (b) another MSO, Geminorium MG LLC, in exchange for ordering laboratory tests from Boston Heart.

• Baxter Montgomery, M.D., of Houston, Texas, and his professional association B-Saz, P.A., agreed to pay $60,000 to settle allegations that from December 29, 2015 to February 3, 2018 he received kickbacks from (a) one MSO, Ascend MSO of TX, LLC, in exchange for ordering True Health laboratory tests from Little River; and (b) another MSO, Indus MG LLC, in exchange for ordering laboratory tests from True Health.

• Murtaza Mussaji, D.O., of Houston, Texas, agreed to pay $215,000 to settle allegations that from August 7, 2015 to November 14, 2017 he received kickbacks from (a) one MSO, SYNRG Partners LLC, in exchange for ordering True Health laboratory tests from Little River; and (b) another MSO, Catalyst Health Partners LP, in exchange for ordering laboratory tests from True Health.

• David Sneed, D.O., of Austin, Texas, agreed to pay $200,000 to settle allegations that from September 30, 2015 to December 23, 2016 he received kickbacks from an MSO, Alpha Rise Health LLC, in exchange for ordering True Health and Boston Heart laboratory tests from Little River.

• Kevin Lewis, D.O. of Houston, Texas, agreed to pay $57,324 to settle allegations that from June 24, 2015 to April 20, 2016, he received kickbacks from an MSO, Alpha Rise Health, LLC, in exchange for ordering Little River and Boston Heart laboratory tests.

• Angela Mosley-Nunnery, M.D. of Kingwood, Texas, agreed to pay $166,500 to settle allegations that from April 12, 2016 to June 14, 2018 she received kickbacks from one MSO, North Houston MSO Group, Inc. and another MSO, Tomball Medical Management, in exchange for ordering laboratory tests from Little River and True Health.

As part of their settlements, the physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.

In addition, the United States announced a settlement with Richard DeFoore of Anson, Texas, the former Chief Executive Officer of Jones County Regional Healthcare d/b/a Stamford Memorial Hospital (Stamford), which was a small hospital in Stamford, Texas.  In late 2015 and early 2016, DeFoore allegedly was approached by representatives of True Health and a partner company, who proposed an arrangement by which Stamford could profit by billing for diagnostic laboratory tests.  Under the arrangement, which expanded to include Boston Heart tests, Stamford allegedly coordinated with True Health and Boston Heart representatives and paid volume-based commissions to independent contractor recruiters, who used MSOs to make payments to doctors that were disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals.  Pursuant to the alleged arrangement, Stamford billed the resulting claims to commercial insurers and True Health and Boston Heart billed the resulting claims to Medicare and other federal healthcare programs.  Under the terms of the settlement agreement, DeFoore agreed to pay $50,000, to cooperate with the Department’s investigations of and litigation against other parties, and to be excluded from participation in federal healthcare programs for three years.

“Medical professionals who seek to enrich themselves through kickback schemes undermine federal health care programs and increase health care costs for everyone,” said Special Agent in Charge Miranda L. Bennett of the U.S. Department of Health and Human Services Office of Inspector General. “This settlement demonstrates our commitment to working with our state and federal law enforcement partners to investigate such allegations of fraud.”

“As the investigative arm of the Department of Defense's Office of Inspector General (DoD IG), one of the primary missions of the Defense Criminal Investigative Service (DCIS) is to safeguard the military's valuable health care system commonly known as Tricare," said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office.  "DCIS will continue to aggressively investigate allegations of kickbacks that undermine the integrity of Tricare and the health care provided to our service members, retirees and their families."

“The Stark Law and the Anti-Kickback Statute are designed to protect the integrity of federal healthcare programs,” said Special Agent in Charge Jeffrey Breen of the Department of Veterans Affairs Office of Inspector General’s South Central Field Office.  “The VA OIG is pleased to have been able play a role in this case and work with the U.S Attorney’s office to hold accountable those who seek to defraud taxpayer-funded healthcare programs.”

“We are grateful for the efforts of the U.S. Attorney’s Office, the Health and Human Services Office of the Inspector General, and the Defense Criminal Investigative Service. The service members and families that have and continue to serve our Nation depend on the integrity of the healthcare system,” said Lt. Gen. Ronald Place, Director of the Defense Health Agency. “By rooting out instances where that integrity is threatened, we honor that service.”

The civil settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG, DCIS, and VA-OIG.  As a result of its efforts, the United States has recovered more than $27.76 million relating to conduct involving Boston Heart, True Health, and Little River, including False Claims Act settlements with Boston Heart for $26.67 million in November 2019 and with Dr. Bibi Tasleyma Sattar and Oakmont Wellness Center, PA for $210,000 in July 2020. This matter and the related matters were handled by Assistant U.S. Attorneys James Gillingham, Adrian Garcia, and Betty Young and Senior Trial Counsel Christopher Terranova.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

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BEAUMONT, Texas – A Honduran national residing in Port Arthur has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today. 

Santos Orellana-Hernandez, 47, pleaded guilty on July 23, 2021, to use of interstate commerce facilities in the commission of murder-for-hire, tampering with a witness by intimidation and threats, and conspiracy to commit witness tampering.  Orellana-Hernandez was sentenced to 100 months in federal prison today by U.S. District Judge Thad Heartfield.

According to information presented in court, from January to March of 2020, Orellana-Hernandez, residing in Port Arthur, Texas, solicited the murder of two extended family members residing in Honduras.  Specifically, Orellana-Hernandez solicited Gustavo Ramires, a person located in Honduras, to kill Orellana-Hernandez’s mother-in-law, G.V., and brother-in-law, J.A.V.  The purpose of the intended murders was revenge against Orellana-Hernandez’s soon-to-be ex-wife, who was seeking a divorce from Orellana-Hernandez in Jefferson County, Texas.  Orellana-Hernandez reportedly told E.A.V. that he would make her “cry tears of blood.”

Orellana-Hernandez offered to pay Ramires $200,000 in Honduran Lempira (approximately $8,000 in U.S. dollars) upon proof that Ramires had killed G.V., J.A.V., and two other individuals. Orellana-Hernandez directed Ramires to perform the killings on or after April 21, 2020, the date when the divorce was to become final.  Ramires was additionally instructed to provide photographic proof of the killings before he would receive payment.  Ramires later placed a recorded telephone call to Orellana-Hernandez, in which the two discussed the murder-for-hire plot, using code language such as “planting the corn,” to refer to the killings.  Ramires later told investigators that “planting the corn” meant burying victims’ bodies.

Orellana-Hernandez was indicted by a federal grand jury on May 20, 2020 and taken into federal custody.  In early June, while he was jailed, Orellana-Hernandez conspired with his brother to intimidate E.A.V. in an attempt to make her “withdraw” the murder-for-hire accusation. On November 4, 2020, the grand jury returned a superseding indictment that added the witness tampering charges. 

“This case exemplifies excellent local and federal law enforcement cooperation, and the FBI collaborated with our international partners in Honduras to successfully stop a senseless act of violence by Orellana-Hernandez,” said U.S. Attorney Brit Featherston.  “The Port Arthur Police Department and the FBI did an excellent job!  Crimes of violence, here or abroad, will not be tolerated and all the tools of law enforcement will be utilized to stop violent crime and prosecute the perpetrators to the fullest extent of the law.”

This case was investigated by the Federal Bureau of Investigation and the Port Arthur Police Department and prosecuted by Assistant U.S. Attorney John B. Ross and Special Assistant U.S. Attorney Sean C. Day.

BEAUMONT, Texas – Two Jake’s Fireworks defendants, including the owner of the Nederland business, have pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Jake Ellis Daughtry, 35, of Nederland, pleaded guilty to conspiracy to possess with intent to distribute a date rape drug over the internet to an unauthorized purchaser. Kip William Daughtry, 48, of Vidor, pleaded guilty to possession with intent to distribute a controlled substance analogue.

According to information presented in court, Jake Daughtry and Kip Daughtry are the leaders of a Chemical Trafficking Organization (“CTO”) cell operating on a national scale.  Investigation of the organization began in 2018 when DEA West Palm Beach, Florida intercepted mail parcels of a chemical identified as 1,4 butanediol, commonly referred to as “BDO.”  BDO is a chemical manufactured only for industrial or laboratory use as a floor stripper or vehicle wheel cleaner and is not intended for human consumption.  Investigators determined that when BDO is ingested, it immediately metabolizes into GHB (a known date-rape drug) with the same effects, causing potential overdoses, addiction, and death.

DEA traced the seized parcels to their origination point, Right Price Chemicals, a business located on Twin City Highway in Nederland, Texas, and owned by Jake Daughtry.  A seasonal fireworks business called “Jake’s Fireworks” is also operated at that location.  Customers from all over the United States were able to order quantities of BDO from the Right Price Chemicals website in small amounts to use for personal consumption. The Daughtry’s continued to sell BDO even after becoming aware that some customers were ingesting the substance for its’ narcotic effect, rather than using it for its intended commercial purpose.  Agents determined that since 2016, Right Price Chemicals has distributed approximately 7,000 gallons of BDO over thousands of orders, and that those sales generated $4.5 million.

The defendants were indicted by a federal grand jury on June 3, 2020 and face up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

In addition, Jake Daughtry, Joe Daughtry, Sandra Daughtry, and Kip Daughtry agreed to the entry of a permanent injunction that prohibits them, or Right Price Chemicals, to ever sell or distribute BDO to anyone, anywhere, at any point in the future.

“After being notified by Florida law enforcement that this dangerous and lethal chemical was being sold to users for a nefarious purpose, East Texas law enforcement agencies took action to protect the public and prevent others from falling prey to the sale and use of this dangerous substance,” said U.S. Attorney Brit Featherston.  “This was a complicated investigation involving numerous investigative agencies and both the criminal and civil divisions of the U.S. Attorney’s Office.  Their collaborative efforts have made our community and country a safer place to live.”

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

This case is being investigated by the Drug Enforcement Administration West Palm Beach, Florida, and Beaumont; U.S. Postal Service; Internal Revenue Service-Criminal Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Jefferson County Sheriff's Office.  Essential support and coordination was provided by numerous components of DEA headquarters and the Department of Justice’s multi-agency Special Operations Division (SOD).  This case is being prosecuted by Assistant U.S. Attorneys Christopher Rapp, Donald Carter and Robert Wells.

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PLANO, Texas – An Arthur City, Texas, man has been convicted of federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Steven Dewayne Wilson, 57, was found guilty by a jury of being a felon in possession of a firearm following a one-week trial before U.S. District Judge Sean Jordan. 

According to information presented in court, on March 8, 2017, members of the Lamar County Sheriff's Office responded to a call for service in Arthur City, where it was reported that gunshots had been fired near a residence.  It was also reported that the shooter had assaulted another person by striking them in the head with the barrel of a firearm.  Upon arrival, law enforcement officers made contact with the reporting parties and searched for Wilson, who was identified as the shooter and lived in a nearby camper.  Unable to locate him, the officers left the scene, but they were called back early the next morning with reports that Wilson had returned.  Upon contact with Wilson, deputies noticed spent shell casings scattered in front of his camper.  Wilson denied possessing any firearms.  A search warrant was eventually obtained for Wilson's camper and vehicles.  During the search of Wilson's truck, officers found a rifle shoved under the backseat of the cab, and a plastic baggie of ammunition stuffed under the driver’s seat.  Wilson, a convicted felon, was arrested for felon in possession of a firearm.  During a subsequent interview, Wilson admitted to possessing the firearm, placing it in his truck, and firing it a few days prior.  However, at trial, Wilson testified that an acquaintance named “James” actually brought the firearm to Wilson’s residence and that Wilson had never actually handled the firearm.  Wilson was not able to provide further details as to whereabouts of “James” or any contact information for “James.” 

Wilson was indicted by a federal grand jury on August 14, 2019.  He faces up to 10 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Lamar County Sheriff’s Office and prosecuted by Assistant U.S. Attorneys Wes Wynne and Lesley Brooks. 

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SHERMAN, Texas – A Plano man has been sentenced to 25 years in federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Nathaniel Edward Gonzalez, 36, pleaded guilty on March 16, 2021 to possession with intent to distribute heroin resulting in death and was sentenced to 300 months in federal prison on Jan. 6, 2022, by U.S. District Judge Amos L. Mazzant.

According to information presented in court, on Jan. 16, 2019, Gonzalez distributed heroin to an individual at his place of business in Plano.  That individual was found deceased by his coworkers with the needle still in his arm.  An investigation led officers to Gonzalez, who had previously been convicted of the same conduct in 2005 when he provided heroin to a 16-year-old resulting in an overdose death.  Gonzalez was indicted by a federal grand jury on Feb. 7, 2019.

"Illegal drugs continue to damage our communities," said U.S. Attorney Brit Featherston.  "We will use all our tools to arrest and prosecute those who choose to harm others by peddling their dangerous poisons."

The case was investigated by the Plano Police Department Narcotics Unit and prosecuted by Assistant U.S. Attorney Tracey Batson.

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BEAUMONT, Texas – A Lufkin man has been sentenced to federal prison for federal child pornography violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Colby Allen, 20, pleaded guilty on August 11, 2021, to distributing child pornography and was sentenced to 162 months in federal prison by U.S. District Judge Thad Heartfield on Jan. 6, 2022.

According to information presented in court, on Feb. 20, 2020, an undercover law enforcement officer accessed an instant messaging chat group known to have users who posted images and videos of child pornography. The officer observed that a particular user posted two videos to the group, including a video depicting the sexual abuse of a minor. Further investigation revealed that the user of the messenger account was Allen.  On Nov. 19, 2020, law enforcement officers executed search warrants at Allen’s residences in Lufkin and Beaumont. During the search of Allen’s Beaumont residence, officers seized his cellular telephone, which was later forensically imaged. A review of the forensic imaging revealed numerous video and image files depicting child pornography. The images and videos located on Allen’s phone included the two videos uploaded to the instant messaging group on Feb. 20, 2020.  A federal grand jury returned an indictment charging Allen with federal violations on Jan. 20, 2021.

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

This case was investigated by the Federal Bureau of Investigation, Lufkin and Beaumont offices; the Texas Department of Public Safety; the Lufkin Police Department; and the Lamar University Police Department.  This case was prosecuted by Assistant U.S. Attorney Lauren Gaston.

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SHERMAN, Texas – A Nigerian man has been sentenced to federal prison for fraud violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Shalom Olumide Ayotunde, 39, pleaded guilty on July 1, 2021, to passport fraud, false claim to U.S. citizenship, wire fraud, and false statement to a financial institution, and was sentenced to 46 months in federal prison today by U.S. District Judge Amos L. Mazzant, III.  Ayotunde was also ordered to pay restitution in the amount of $1,067,000.

According to court documents, in June 2018, Ayotunde provided false identifying information in his application for a U.S. passport, and in doing so, also falsely claimed to be a U.S. citizen.  Ayotunde was also involved in falsifying information in connection with numerous applications for Payment Protection Program loans, and ultimately received more than $1 million in fraudulent PPP loan proceeds. Additionally, evidence showed that Ayotunde was part of a conspiracy to defraud companies through business email compromise schemes and acted as a money mule when he knowingly received and transferred proceeds of fraudulent activity. Evidence showed that Ayotunde received or attempted to receive more than $800,000 in stolen funds.  A federal grand jury returned an indictment charging Ayotunde with federal violations on Nov. 13, 2020.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

 If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 10am-6pm Eastern Time, Monday-Friday. English, Spanish, and other languages are available.   

This case was investigated by the U.S. Department of State- Diplomatic Security Service and the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Camelia Lopez.

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SHERMAN, Texas – An Allen man has been sentenced to federal prison for federal child exploitation violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Clay Melton Denton, 57, was found guilty on June 11, 2021, of distribution, receipt and possession of child pornography and was sentenced to 20 years in federal prison today by U.S. District Judge Amos L. Mazzant, III.  Denton was also ordered to pay an assessment of $10,000 under the Amy, Vicky, and Andy Victim Assistance Act of 2018.

According to the court documents and testimony at trial, in January and March 2018, undercover officers with the Plano Police Department and the Garland Police Department received child pornography, via an online platform, that had been distributed to them by a computer user.  The officers traced the online conduct to the Denton residence in Allen, Texas.  Members of the FBI obtained a search warrant for the residence, which they served on April 25, 2018.  The searching team discovered multiple digital devices in the residence, including server racks, network area storage devices, laptops, hard drives, cellular phones, and digital storage media. Agents testified that the entire second story of the house was filled with floor-to-ceiling book cases storing digital devices, manuals, and peripherals.  Additional testimony revealed that forensic analysis of the seized devices took almost one year.  During this forensic analysis, personnel discovered tens of thousands of images and videos of child pornography.  Specifically, evidence demonstrated that a laptop belonging to Denton and located on one of his desks contained the same software used to distribute child pornography to the undercover officers.  That software was also used to obtain child pornography, which was saved on a different portion of Denton’s computer.  Evidence also revealed that child pornography was located on a 60+ terabyte storage device that Denton owned and possessed.  A federal grand jury returned an indictment charging Denton with federal violations on Sep. 11, 2019.

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

This case was investigated by the Plano Police Department, Garland Police Department and the FBI Dallas Child Exploitation Task Force and prosecuted by Assistant U.S. Attorneys Marisa Miller and Maureen Smith.

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BEAUMONT, Texas – A Houston man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Gary Dwon Gaffney, 36, pleaded guilty to making false statements to federal agents today before U.S. District Judge Marcia Crone.

According to information presented in court, on August 21, 2021, Gaffney was arrested on an unrelated warrant for a theft charge and was booked into the Liberty County Jail.  While in custody, Gaffney requested to speak to officers in reference to having knowledge about a plot to bomb the Mickey Leland Federal Building in Houston.  Gaffney named two individuals and claimed they had already acquired fertilizer and detonation devices to execute the bombing.  As a result of Gaffney’s false statements, an extensive federal investigation was launched.  Agents were not able to find any evidence to confirm Gaffney’s claims and he eventually admitted to making the fraudulent statements.

Gaffney was indicted by a federal grand jury on Nov. 3, 2021.  He faces up to five years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Rachel Grove.

BEAUMONT, Texas – A Beaumont man has been sentenced to prison for federal violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Moses Ray Rhine, Jr., 21, pleaded guilty on Aug. 11, 2021, to Hobbs Act robbery and brandishing a firearm during a crime of violence and was sentenced to 180 months in federal prison today by U.S. District Judge Marcia Crone.

According to court documents, from Jan. 11, 2021 through Jan. 21, 2021, Rhine and others conspired to commit armed robberies of at least five convenience stores located in Southeast Texas.  The stores were all engaged in interstate commerce that employed clerks who were engaged in the commercial activities of the stores at the time of the robberies.  Each store was equipped with functioning surveillance cameras that recorded the robberies.  Local and federal agents interviewed Rhine and he confessed to his role in the robberies.  The Hobbs Act prohibits actual or attempted robbery affecting interstate commerce.

Rhine was indicted by a federal grand jury on June 2, 2021.  

This case was investigated by the Beaumont Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney John B. Ross.

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BEAUMONT, Texas – A Beaumont man has been sentenced to prison for a federal firearms violation in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Darrell Jordan, 23, pleaded guilty on July 12, 2021, to being a prohibited person in possession of a firearm and was sentenced to 71 months in federal prison today by U.S. District Judge Thad Heartfield.

According to court documents, on June 4, 2020, Beaumont police responded to a call in reference to an assault at a local hotel.  Officers were shown photos of the victim in the hotel parking lot near a maroon Escalade.  Officers located the vehicle in the parking lot of the Executive Inn Hotel in Beaumont and knocked on the nearest hotel room door where the vehicle was parked and Jordan answered.  While interviewing the other occupants of the room, police observed a revolver in plain view.  Jordan told police he was a convicted felon and was taken into custody.  Detectives also found two additional firearms in the room near Jordan’s shoes.  As a convicted felon, Jordan is prohibited from owning or possessing firearms or ammunition.    Jordan was indicted by a federal grand jury on March 3, 2021, and charged with federal firearms violations.

This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

This case was investigated by the Beaumont Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Rachel Grove.

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TEXARKANA, Texas – A Coronado, California, man has been found guilty of federal violations related to a health care kickback scheme in the Eastern District of Texas, announced U.S. attorney Brit Featherston today.

Vincent Marchetti, Jr., 57, was found guilty by a jury following a month-long trial before U.S. District Judge Robert W. Schroeder, III.

“Fraud on our health care system cost taxpayers millions of dollars,” said U.S. Attorney Brit Featherston.  “The defendant convicted today, and the others prosecuted in this large conspiracy, will suffer their fate at the hands of our excellent justice system.  All should know that an investigation and prosecution such as this takes thousands of hours of work by law enforcement and prosecutors.  My hat goes off to them for their excellent work to protect the citizens of our communities.”

“Kickback schemes victimize patients seeking legitimate care and line the pockets of criminals who pay or receive them,” said Miranda L. Bennett, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General, Dallas Region.  “We will continue working with our law enforcement partners to protect the integrity of federal health care programs by exposing these harmful schemes and holding fraudsters accountable.”

“The defendant intentionally deceived the health care system to receive unlawful benefits and payments. Health care fraud causes billions of dollars in damages a year and affects patients by raising their premiums and taxes,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “The FBI will continue working alongside our public and private sector partners to pursue individuals who attempt to profit off of patients and insurance holders.”

“Those involved in kickback schemes and fraudulent business enterprises will eventually face justice no matter where they operate,” said Christopher Miller, acting Special Agent in Charge, HSI Dallas.  “We remain relentless in our pursuit of those who violate the law through fraudulent practices for personal gain.”

According to information presented in court, Marchetti conspired with others to pay and receive kickbacks in exchange for the referral of, and arranging for, health care business, specifically pharmacogenetic (PGx) tests.  Pharmacogenetic testing, also known as pharmacogenomic testing, is a type of genetic testing that identifies genetic variations that affect how an individual patient metabolizes certain drugs.  The illegal arrangement concerned the referral of PGx tests to clinical laboratories in Fountain Valley, California; Irvine, California; and San Diego, California.  More than $28 million in illegal kickback payments were exchanged by those involved in the conspiracy.

In December 2019, twelve individuals from three states were charged for their roles in the kickback conspiracy.  A federal grand jury in the Eastern District of Texas returned an indictment against Philip Lamb, 46, of Scottsdale, Arizona; Nicolas Arroyo, 40, of Tempe, Arizona; Vincent Marchetti, Jr.; William Flowers, 56, of Houston; Steven Donofrio; James J. Walker, Jr. a/k/a Jimmy Walker, 47, of Frisco; Timothy Armstrong, 64, of Frisco; Virginia Blake Herrin, 56, of Frisco; Patrick Ridgeway, 52, of Jackson, Mississippi; Chismere Mallard, 41, of McAllen; Dr. Ray W. Ng; and Ashley Kretzschmar, 36, of Aledo; for conspiring to commit illegal remunerations in violation of the Anti-Kickback Statute.

Philip Lamb, Nicolas Arroyo, Jimmy Walker, Virginia Blake Herrin, Patrick Ridgeway, Chismere Mallard, and Ashley Kretzschmar pleaded guilty prior to trial.

Kimberly Willette, 59, of Friendswood, and Edwin Chad Isbell, 48, of McKinney, also pleaded guilty to related charges.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remunerations in exchange for the referral of or arranging for or recommending the ordering of items or services payable under federal health care programs.  Under federal statutes, violations of the Anti-Kickback statute are punishable by up to five years in federal prison.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, the FBI Dallas – Frisco Resident Agency, and the U.S. Department of Homeland Security, Homeland Security Investigations.  It was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld, Lucas Machicek, Adrian Garcia, Brent Andrus, and L. Frank Coan, Jr., with assistance from Assistant U.S. Attorney Stephan E. Oestreicher, Jr., and Special Assistant U.S. Attorney Laurel E.P. Simmons.

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BEAUMONT, Texas – A Lumberton man has pleaded guilty to federal child pornography violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Stephen John Pieper, 23, pleaded guilty to three counts of production of child pornography today before U.S. District Judge Marcia A. Crone.

According to court documents, an investigation into claims that Pieper had sexually exploited teen girls revealed Pieper had engaged in sexual activity with three victims, aged 15 and 16-years old.  As part of the sexual contact with the victims, Pieper used his own cellular phone to record the minors engaged in sexually explicit conduct.  Pieper admitted to uploading the videos and images he captured of the victims into Snapchat accounts.  Pieper’s exploitation of the three victims spanned 2016 through 2018, during which time Pieper was an adult who was more than 5 years older than his victims.

Pieper was indicted by a federal grand jury on April 7, 2021.  He faces a minimum of 15 years and up to 30 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

This case is being investigated by Homeland Security Investigations and the Texas Attorney General’s Office and prosecuted by Assistant U.S. Attorney Rachel Grove.

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BEAUMONT, Texas — The Department of Justice, FBI, U.S. Postal Inspection Service and five other federal law enforcement agencies announced the completion of the fourth annual Money Mule Initiative, which targeted networks of individuals through which international fraudsters obtain proceeds of fraud schemes. These individuals, sometimes referred to as money mules, receive money from fraud victims and forward the illicit funds, often to overseas perpetrators. 

By receiving and transferring illicit funds, money mules facilitate a wide range of fraud schemes, including those that often predominately impact older Americans — like romance scams and lottery fraud — and those that target companies through business e-mail compromise schemes. Money mules also assist the theft of funds earmarked for pandemic relief, including unemployment insurance and small business loan funds. Some money mules are aware that their actions facilitate international fraud schemes. Others, however, first interact with fraud schemes as victims and may be unaware that their actions are furthering criminal activity.         

U.S. law enforcement took action to address 4,750 money mules over the last 10 weeks; enforcement actions occurred in every state in the country. These actions more than doubled the number of actions taken during last year’s effort. Agencies are also conducting outreach to educate the public about how fraudsters use money mules and how to avoid unknowingly assisting fraud by receiving and transferring money.

“Without money mules, many foreign fraudsters targeting American consumers, businesses and pandemic relief funds could not reap the proceeds of their schemes,” said Associate Attorney General Vanita Gupta. “The department and its partners will use every tool at our disposal — consumer education, disruption and prosecution — to cripple foreign fraudsters’ ability to get money from victims’ pockets to perpetrators’ bank accounts.”

Law Enforcement Actions

The department’s Consumer Protection Branch and the FBI led the initiative with the U.S. Postal Inspection Service. Other participating agencies were the Department of Labor Office of Inspector General, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Small Business Administration Office of Inspector General, U.S. Secret Service and U.S. Treasury Inspector General for Tax Administration. The campaign was conducted simultaneously with a Europol initiative, the European Money Mule Action (EMMA). Additionally, in several districts, including the District of Arizona and the Northern District of Georgia, federal law enforcement have been working closely with their state and local law enforcement counterparts.

“This year’s Money Mule Initiative successfully halted the activity of hundreds of money mules worldwide thanks to the persistence and partnership of the FBI and our federal, state, local and international partners,” said Executive Assistant Director Brian Turner of the FBI's Criminal, Cyber, Response and Services Branch. “Money mules make it easier for criminals to hide their activity, and harder for law enforcement to follow their tracks. Today’s announcement is an unmistakable warning for those who move money for criminal enterprises: even if you don’t know you’re committing a crime, acting as a money mule is illegal and punishable, and the FBI and our partners will use all available tools to disrupt the flow of funds to criminal networks.”

“The U.S. Postal Inspection Service takes great pride in our history of protecting the public from being deceived by scammers,” said Chief Postal Inspector Gary Barksdale for the U.S. Postal Inspection Service. “We work hard to safeguard vulnerable consumers through aggressive criminal investigations, as well as proactive consumer outreach, as part of our mission to protect those who might fall victim to cleverly designed deceptive offers. The Money Mule Initiative is another example of our law enforcement commitment, and that of our law enforcement partners, to vigorously pursue individuals who knowingly or unknowingly participate in criminal activity of this nature; bring them to justice and stop them in their tracks from victimizing the American public.”

The thousands of actions taken by law enforcement ranged from warning letters to civil and administrative actions, to criminal prosecutions. Law enforcement served approximately 4,670 letters warning individuals that their actions were facilitating fraud schemes. These letters outlined the potential consequences for transferring money acquired illegally. Civil or administrative actions were filed against 11 individuals, and through seizures and voluntary return of funds, law enforcement obtained nearly $3.7 million in fraud proceeds.

Additionally, more than 30 individuals were criminally charged for their roles in receiving and forwarding victim payments or otherwise laundering fraud proceeds. These cases included:

• The U.S. Attorney’s Office for the Eastern District of Texas obtained a guilty plea by an individual who defrauded elder persons by posing as a special agent with the Social Security Administration, and another guilty plea by an individual who used fake identities to open bank accounts to facilitate the movement of fraud proceeds.
• The Consumer Protection Branch and U.S. Attorney’s Office for the Central District of California charged four individuals who laundered gift cards purchased by fraud victims.
• Two U.S. Attorney’s Offices, the District of Rhode Island and the Western District of Pennsylvania, indicted individuals who, among other conduct, personally collected money from grandparent scam victims.
• The U.S. Attorney’s Office for the Western District of Tennessee charged an individual who facilitated the theft of unemployment insurance funds.
• The U.S. Attorney’s Office for the Southern District of New York indicted a ring of individuals who laundered money for romance scams and business email compromise fraud schemes.

The charges also consisted of cases brought against individuals who facilitated business email compromise schemes, including charges brought by the U.S. Attorney’s Offices for the Eastern District of Virginia, the Eastern District of Wisconsin and the Western District of Kentucky. Additional charges were brought against money mules by U.S. Attorney’s Offices for the Northern District of Georgia, the Eastern District of Louisiana, and the District of Nebraska.

Criminal charges are merely allegations. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Community Outreach and Prevention

Agencies also turned their attention to educating the public about how fraudsters recruit individuals to serve as money mules, signs of money mule activity and steps that should be taken if someone has unknowingly facilitated fraud by moving money.

These efforts included:

• The Eastern District of Texas’s Elder Justice Coordinator filmed an FBI Public Service Announcement with the Northern District of Texas warning the public about Money Mules.
• U.S. Postal Inspection Service created fliers that were displayed in post offices across the country during the Money Mule Initiative.
• FBI’s Internet Crime Complaint Center (IC3) released a money mule public service announcement.
• The Department of Labor Office of Inspector General provided information about money mule activity to state work force agencies.
• Members of the Attorney General’s Coronavirus Fraud Enforcement Task Force used outreach materials created by the Pandemic Response Accountability Committee (PRAC) to educate the public about the use of money mules to steal pandemic relief funds.

Other government agencies joining the public awareness effort included the Consumer Financial Protection Bureau, which created new money mule scam awareness materials, as well as the Department of Health and Human Services’ Administration for Community Living and AmeriCorps Seniors. By increasing awareness of money mule activity, these efforts and others sought to prevent individuals from becoming involved in money mule activity.

For more information on money mules, please visit https://www.justice.gov/civil/consumer-protection-branch/money-mule-initiative.

Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice. Additional information about the Consumer Protection Branch and its elder fraud enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).    

The Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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BEAUMONT, Texas – The Department of Justice announced more than $139 million in grant funding through the department’s Office of Community Oriented Policing Services (COPS Office) COPS Hiring Program (CHP). The awards provide direct funding to 183 law enforcement agencies across the nation, allowing those agencies to hire 1,066 additional full-time law enforcement professionals. In the Eastern District of Texas, San Augustine County, was awarded funding totaling $241,340.

“The U.S. Attorneys’ Office is proud to be a partner with the San Augustine County Sheriff’s Office,” said U.S. Attorney Brit Featherston.  “This supplement will help keep citizens of the county safer and it will improve officer safety for the department.”

“We are committed to providing police departments with the resources needed to help ensure community safety and build community trust,” said Attorney General Merrick B. Garland. “The grants we are announcing today will enable law enforcement agencies across the country to hire more than 1,000 additional officers to support vitally important community oriented policing programs.”

CHP is a competitive award program intended to reduce crime and advance public safety through community policing. CHP provides funds directly to law enforcement agencies to hire new or rehire additional career law enforcement officers, thereby increasing their community policing capacity and crime prevention efforts. Of the 183 agencies awarded grants today, approximately half will use the funding to focus on building legitimacy and trust between law enforcement and communities; 41 agencies will seek to address high rates of gun violence; 21 will focus on other areas of violence; and 19 will focus CHP resources on combating hate and domestic extremism or supporting police-based responses to persons in crisis. The complete list of awards can be found here.  

Since its creation in 1994, COPS has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and Tribal law enforcement agencies to fund the hiring and redeployment of more than 135,000 officers. CHP, COPS’ flagship program, continues to be in demand today: In FY21, COPS received 590 applications requesting nearly 3,000 law enforcement positions. For FY22, President Biden has requested $537 million for CHP, an increase of $300 million.

To learn more about CHP, please visit https://cops.usdoj.gov/chp-award. For additional information about the COPS Office, please visit https://cops.usdoj.gov/.  

The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. The only Department of Justice agency with policing in its name, the COPS Office was established in 1994 and has been the cornerstone of the nation’s crime fighting strategy with grants, a variety of knowledge resource products, and training and technical assistance. Through the years, the COPS Office has become the go-to organization for law enforcement agencies across the country and continues to listen to the field and provide the resources that are needed to reduce crime and build trust between law enforcement and the communities served.

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A federal jury convicted a Texas man and a Missouri man on Tuesday of Racketeer Influenced and Corrupt Organizations charges stemming from their membership in the white supremacy prison gang, the Aryan Circle, between 2010 and 2021. 

According to court documents and evidence presented at trial, Aryan Circle is a race-based, violent prison gang with hundreds of members operating throughout the country, both inside and outside of prisons. The Aryan Circle enforces its rules and promotes discipline among its members, prospects, and associates through threats, intimidation, assaults, and murder.

Evidence presented at trial showed that William Glenn Chunn, aka Big Head, 39, of Conroe, Texas, is one of the five highest-ranking Aryan Circle leaders in the nation. He used his leadership role to order violent stabbings against rival gang members and other victims, as well as to seek out and retaliate against individuals he believed were cooperating with law enforcement. Evidence presented at trial showed that Jesse Paul Blankenship, aka JP, 38, of Stratford, Missouri, “put in work” by committing violence on behalf of the gang, including shooting at two victims inside their home and participating in a kidnapping and removal of another member’s patch, or gang tattoo, by burning it from the victim’s skin using a metal rod heated with a blowtorch. After committing these crimes, Blankenship moved up in rank in Aryan Circle and has since ordered additional acts of violence.

Chunn was convicted of racketeering conspiracy, including an enhanced sentencing factor for an attempted murder he ordered relating to a violent stabbing. Blankenship was convicted of racketeering conspiracy, kidnapping in aid of racketeering, and conspiracy to commit kidnapping in aid of racketeering. Both defendants face maximum penalties of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The case was investigated by the following agencies: Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the Federal Bureau of Prisons; Texas Department of Public Safety; Houston Police Department-Gang Division; Montgomery County (TX) Precinct One Constable’s Office; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Indiana State Police; Fort Smith (AR) Police Department; Arkansas Department of Corrections; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Indiana Department of Corrections; Carrollton (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office; Tarrant County (TX) Sheriff’s Office; Evangeline Parish (LA) Sheriff’s Office; Smith County (TX) Sheriff’s Office; McCurtain County (OK) Sheriff’s Office; Montgomery County (TX) District Attorney’s Office; Liberty County (TX) District Attorney’s Office; Harris County (TX) District Attorney’s Office; Mercer County (NJ) Prosecutor’s Office; Evangeline Parish (LA) District Attorney’s Office; and the Sebastian County (AR) District Attorney’s Office. Valuable assistance was provided by the Organized Crime Drug Enforcement Task Forces.

Trial Attorneys Beth Lipman and Rebecca Dunnan of the Justice Department’s Organized Crime and Gang Section and Assistant U.S. Attorney Christopher Rapp of the U.S. Attorney’s Office for the Eastern District of Texas are prosecuting the case.

BEAUMONT, Texas –A Texas man and a Missouri man were convicted at trial of Racketeer Influenced and Corrupt Organizations charges stemming from their membership in the white supremacy prison gang, the Aryan Circle, between 2010 and 2021, announced U.S. Attorney Brit Featherston today.

According to court documents and evidence presented at trial, Aryan Circle is a race-based, violent prison gang with hundreds of members operating throughout the country, both inside and outside of prisons.  The Aryan Circle enforces its rules and promotes discipline among its members, prospects, and associates through threats, intimidation, assaults, and murder.

A federal jury convicted a Texas man and a Missouri man on Tuesday of Racketeer Influenced and Corrupt Organizations charges stemming from their membership in the white supremacy prison gang, the Aryan Circle, between 2010 and 2021.

Evidence presented at trial showed that William Glenn Chunn, aka Big Head, 39, of Conroe, Texas, is one of the five highest-ranking Aryan Circle leaders in the nation. He used his leadership role to order violent stabbings against rival gang members and other victims, as well as to seek out and retaliate against individuals he believed were cooperating with law enforcement. Evidence presented at trial showed that Jesse Paul Blankenship, aka JP, 38, of Stratford, Missouri, “put in work” by committing violence on behalf of the gang, including shooting at two victims inside their home and participating in a kidnapping and removal of another member’s patch, or gang tattoo, by burning it from the victim’s skin using a metal rod heated with a blowtorch. After committing these crimes, Blankenship moved up in rank in Aryan Circle and has since ordered additional acts of violence.

“This case exemplifies great collaboration between federal, state and local law enforcement to not only stop gang violence in prison, but also to protect innocent persons when that activity overflows into our communities, said Eastern District of Texas U.S. Attorney Brit Featherston.  “We will continue to investigate and prosecute those who advocate harm to others, and to specifically target the leaders of violent gangs.”

“Today’s verdicts keep two violent white supremacists from wreaking havoc and hate on the streets of America,” said ATF SAC Fred Milanowski.  “This marks the 36th and 37thconviction under Operation Noble Virtue, which began in Houston and culminated with racketeering prosecutions in six states. This far-reaching national investigation serves as a model for what can be achieved through strong collaboration with our federal, state and local partners”

Chunn was convicted of racketeering conspiracy, including an enhanced sentencing factor for an attempted murder he ordered relating to a violent stabbing. Blankenship was convicted of racketeering conspiracy, kidnapping in aid of racketeering, and conspiracy to commit kidnapping in aid of racketeering. Both defendants face maximum penalties of life in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The case was investigated by the following agencies: Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; the Federal Bureau of Prisons; Texas Department of Public Safety; Houston Police Department-Gang Division; Montgomery County (TX) Precinct One Constable’s Office; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Texas Department of Criminal Justice; New Jersey Department of Corrections-Special Investigations Division; Indiana State Police; Fort Smith (AR) Police Department; Arkansas Department of Corrections; Arnold (MO) Police Department; Jefferson County (MO) Sheriff’s Department; St. Louis Metropolitan Police Department; St. Louis County (MO) Police Department; Indiana Department of Corrections; Carrollton (TX) Police Department; Montgomery County (TX) Sheriff’s Office; Travis County (TX) Sheriff’s Office; Tarrant County (TX) Sheriff’s Office; Evangeline Parish (LA) Sheriff’s Office; Smith County (TX) Sheriff’s Office; McCurtain County (OK) Sheriff’s Office; Montgomery County (TX) District Attorney’s Office; Liberty County (TX) District Attorney’s Office; Harris County (TX) District Attorney’s Office; Mercer County (NJ) Prosecutor’s Office; Evangeline Parish (LA) District Attorney’s Office; and the Sebastian County (AR) District Attorney’s Office. Valuable assistance was provided by the Organized Crime Drug Enforcement Task Forces.

Assistant U.S. Attorney Christopher Rapp of the Eastern District of Texas along with Trial Attorneys Beth Lipman and Rebecca Dunnan of the Justice Department’s Organized Crime and Gang Section are prosecuting these cases.

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BEAUMONT, Texas – Brit Featherston has taken the oath of office to become the United States Attorney for the Eastern District of Texas. Featherston was appointed to the position by Attorney General Merrick Garland and took the oath of office from Chief U.S. District Judge Rodney Gilstrap.                                   

“This is my home; serving and protecting the great citizens of East Texas has been my priority for a long time and it will continue into the future,” said U.S. Attorney Featherston.  “I am blessed to work with a dedicated team of professionals who make it their daily mission to protect the citizens of this great country.  I also look forward to jointly working with our law enforcement partners who bravely protect our communities every day.”

Featherston, 61, of Lumberton, is the chief federal law enforcement official in the Eastern District of Texas, which includes 43 counties stretching from the Oklahoma border to the Gulf of Mexico. The district includes six fully staffed offices in Beaumont, Plano, Tyler, Sherman, Texarkana, and Lufkin with 120 employees, including 60 prosecutors.  Featherston is responsible for the prosecution of federal criminal offenses in the district and will represent the United States in all civil litigation in the district.

Since joining the office in 1996, Featherston has served in the capacity of First Assistant U.S. Attorney, Executive Assistant U.S. Attorney, and supervisory U.S. Attorney.  He was also appointed Acting United States Attorney in September 2016 and served in that capacity for 17 months.  In January 2018, Featherston became the Justice Attaché for the U.S. Embassy in Kabul, Afghanistan.  In addition to prosecuting high-profile cases such as the dragging death of James Byrd, Jr., in Jasper County, Featherston has been instrumental in crisis management operations during numerous Southeast Texas hurricanes, as well as assisting in the establishment of a command post and the investigation and prosecution of crimes related to the space shuttle crash in 2003 in Lufkin.

Featherston was honored to have former United States Attorney Malcolm Bales, his brother Tom Featherston, and Criminal Chief Frank Coan by his side as he took his oath of office from Judge Gilstrap this afternoon.  Wife, Amy, and son, Ben, joined the ceremony by video from Texas Children’s Hospital in Houston where Ben has been in ICU since Sep. 30th recovering from a sudden illness.  Ben is a freshman at the University of Texas at Austin and daughter, Anna, is a senior at Texas A&M University in College Station.       

For more information about the U.S. Attorney’s Office for the Eastern District of Texas, please visit https://www.justice.gov/usao-edtx. 

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BEAUMONT, Texas – Acting United States Attorney for the Eastern District of Texas Nicholas J. Ganjei announced today that he will be stepping down from the role of Acting United States Attorney effective November 16th. 

“The opportunity to serve the American people as Acting United States Attorney was both an awesome responsibility and a tremendous privilege,” said Mr. Ganjei.  “I was incredibly fortunate to have such a skilled team of prosecutors and staff by my side, and I could not have asked for more dedicated and professional law enforcement partners.  I am tremendously proud of the work we have done and all that we have accomplished.  Together, we made a real difference in the lives of the people of East Texas.”

Mr. Ganjei was named the Acting United States Attorney on January 20, 2021, after previously having served as the district’s First Assistant United States Attorney.  As Acting United States Attorney, Mr. Ganjei served as the chief federal law enforcement officer for the district, which includes 43 counties, more than four million people, and stretches across 35,000 square miles from the Oklahoma border to the Gulf of Mexico.  Mr. Ganjei oversaw a staff of approximately 120 prosecutors, civil litigators, and support personnel across six division offices and was responsible for all federal criminal prosecutions and civil litigation in the district involving the United States.   Under his leadership, the Eastern District of Texas advanced a number of Justice Department priorities, from violent crime and cybersecurity to corporate fraud and False Claims Act enforcement.  Mr. Ganjei was the first person of color to serve as the United States Attorney (acting or otherwise) in the Eastern District’s 164-year history.

During his tenure, Mr. Ganjei prioritized the prosecution of large-scale drug trafficking organizations, particularly international drug cartels, and oversaw one of the most prolific extradition practices in the nation.  Mr. Ganjei’s team successfully extradited, convicted, and obtained a life sentence against a high-ranking member of the Los Zetas cartel who participated in the massacre of an entire Mexican village in 2011; obtained a life sentence against a Guatemalan drug lord who supplied cocaine to cartels and guerilla fighters in Central and South America; and successfully prosecuted an international soccer star for his coordination of bulk drug shipments between Colombia and the United States.

Mr. Ganjei also prioritized the investigation and prosecution of complex frauds and white collar crime and increased the office’s staffing and resources devoted to such cases.  Under Mr. Ganjei’s leadership, the Eastern District of Texas obtained a 408-month sentence in a multi-million dollar fraud and money laundering scheme that victimized senior citizens and charities; obtained convictions against multiple individuals in connection with a kickback conspiracy related to genetic testing; obtained a sentence of 84 months for a doctor engaged in health care fraud; successfully prosecuted an engineer who fraudulently sought $13 million in Paycheck Protection Program (PPP) loans; secured a 97-month sentence against a defendant who defrauded an elderly East Texas victim of $4.8 million; successfully prosecuted a wedding planner for fraudulently obtaining more than $3.3 million in PPP loans, and investigated and indicted two defendants for the alleged fraudulent filing of hundreds of Economic Injury Disaster Loan (EIDL) applications.

Mr. Ganjei’s team also obtained bribery convictions against a former Richardson, Texas mayor and her land developer husband; disrupted and prosecuted an enormous international black market operation alleged to have trafficked over $100 million in stolen merchandise; convicted a Texas lawyer who swindled his Colombian drug trafficking clients by claiming he had successfully bribed judges and prosecutors; disrupted and prosecuted an alleged multi-scheme fraud conspiracy charged with stealing $17 million through romance scams and business email compromise; successfully prosecuted a Honduran national who solicited the murder-for-hire of family members; obtained a 30-year sentence against a North Texas pastor for the sexual exploitation of children; and obtained RICO convictions against numerous members of a violent white supremacist prison gang. 

On the civil side, the Eastern District of Texas recovered more than $44 million for the American taxpayer through Affirmative Civil Enforcement resolutions. In 2021, the Eastern District of Texas concluded four investigations into individual providers, totaling nearly $1 million, relating to the providers’ improper billing for implantable neurostimulators. Additionally, the Eastern District of Texas obtained resolutions in excess of $500,000 with four individual providers as part of its ongoing investigation into payment of kickbacks to induce referrals of advanced cardiac lab tests.

A hallmark of Mr. Ganjei’s time as Acting United States Attorney was the leveraging of agency and law enforcement partnerships.  EDTX teamed with the Special Inspector General for Pandemic Recovery as well as the Department of Justice’s Health Care Fraud Strike Force, Civil Frauds Section, Consumer Protection Section, Antitrust Division, and Civil Rights Division, among others, to combat novel criminal and civil legal challenges.

Prior to serving as Acting United States Attorney, Mr. Ganjei was a career prosecutor who handled all manner of federal crimes, having joined the Department of Justice in 2008.  Most recently, Mr. Ganjei investigated and prosecuted fraud, public corruption, and other complex white collar matters.  Mr. Ganjei also prosecuted organized crime, narcotics, and human trafficking cases.  Before joining the Department, Mr. Ganjei clerked for the Honorable Richard Allen Griffin of the Sixth Circuit Court of Appeals and the Honorable Ralph R. Erickson of the Eighth Circuit Court of Appeals (previously of the United States District Court for the District of North Dakota).  Mr. Ganjei has additionally taught on the subjects of civil, criminal, and constitutional law, at both the collegiate and law school level. 

Leadership responsibilities will be handed off to Brit Featherston, who presently serves as the district’s Executive Assistant United States Attorney.

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BEAUMONT, Texas – A federal grand jury in Beaumont has returned a three-count indictment charging nine individuals in drug trafficking conspiracy in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

The indictment was returned on Nov. 3, 2021, and charges the defendants with conspiracy, trafficking in drugs with a counterfeit mark, and money laundering conspiracy.  The indictment remained sealed until the defendants were arrested this week.

The following individuals have been indicted and arrested:

• Tunji Campbell, a/k/a Mike, 43, of Webster;
• Byron A. Marshall, a/k/a Robert Griffin, a/k/a Dr. Griffin, 43, of Houston;
• Cheryl A. Anderson, 43, of League City;
• Ashley A. Rhea, a/k/a Ashley A. Johnson, 35, of Houston;
• Chauntell D. Brown, a/k/a Juan Brown, 49, of Manvel;
• Willis Reed, 60, of Richmond;
• Kalpen D. Patel, 36, of Richmond;
• Jonathan R. Shaver, 35, of Richmond; and
• Gina Acosta, 40, of Fresno.

According to the indictment, from April 2014 until August 2021, the defendants conspired to traffic misbranded and counterfeit drugs, specifically promethazine-codeine cough syrup.  The indictment alleges the conspiracy resulted in approximately $52,736,000 in drug trafficking proceeds.    

“Food and drug products, particularly pharmaceuticals, undergo rigorous testing and inspection by federal authorities to ensure their safety,” said Acting U.S. Attorney Nicholas J. Ganjei.  “When producers evade those inspection and certification requirements, the innocent consumer could potentially be put at risk. EDTX is committed to ensuring public safety and upholding public trust through the vigorous prosecution of those that skirt these safety requirements.”

“These arrests send a strong and unified message that the illicit sales of misbranded and counterfeit drugs will not be tolerated in our communities and those who commit these offenses will be brought to justice,” said Daniel C. Comeaux, Special Agent in Charge Houston Division.  “The DEA and our law enforcement partners will continue to commit significant resources to the identification and investigation of those who are distributing fraudulently labeled drugs in our neighborhoods and communities.” 

“Selling illegal prescription drugs in the U.S. marketplace puts all consumers’ health at risk,” said Special Agent in Charge Charles L. Grinstead, FDA Office of Criminal Investigations Kansas City Field Office. “We will continue to pursue and bring to justice those who jeopardize the public’s health.”

If convicted, the defendants face up to 20 years in federal prison.

This case is being investigated by the Drug Enforcement Administration, U.S. Food and Drug Administration Office of Criminal Investigations, Federal Bureau of Investigation, U.S. Marshals Service, Houston Police Department, Galveston Police Department, Galveston County Sheriff’s Office, Dickinson Police Department, League City Police Department, Pearland Police Department, Pasadena Police Department, Texas City Police Department, Harris County Precent #2, Brazoria County Sheriff’s Office, Fort Bend County Sheriff’s Office, Liberty County Sheriff’s Office, and the Texas National Guard.  This case is being prosecuted by Assistant U.S. Attorneys John B. Ross and Jonathan C. Lee, with assistance from the Civil Division’s Consumer Protection Branch and the FDA’s Office of Chief Counsel.

A grand jury indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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DALLAS, Texas – Acting United States Attorney Nicholas J. Ganjei addressed the North Texas Crime Commission (NTCC) today via Zoom for their regular monthly meeting.

            Acting U.S. Attorney Ganjei was introduced by NTCC Chair David Dean:

            “David, thank you so much for that kind introduction.  Good morning everyone.  I want to thank you all for taking the time to join us on this Veterans Day holiday.  To that end, I would especially thank all the fighting men and women that have made incredible sacrifices, and continue to make such sacrifices, to keep our great nation strong and free.

            Today I’d like to speak to you about the robust international drug investigation, extradition, and prosecution practice happening in your Eastern District of Texas.  Colloquially known as “959” cases, these investigations and prosecutions result in the identification, capture, and conviction of some of the world’s largest and most notorious drug traffickers.  Through joint action with the DEA, HSI, other federal law enforcement partners, as well as our foreign law enforcement counterparts, EDTX can interdict bulk shipments of narcotics before they reach American shores and prosecute those trafficker kingpins who believe themselves above the law simply because they reside overseas.  I’d also like to speak to some of EDTX’s success in this space, and how these cases are, and will remain, a priority for the Eastern District.

            I want to speak to you today about what the Eastern District and its law enforcement partners are doing to stem the tide of the international drug trade – not just inside the borders of its own district, but on the soil of foreign nations and even on the high seas.  But before I do that, it’s probably best that I provide some background on what 959 cases are, and how these cases come to be.  Specifically, how does the United States prove its case when the drugs never actually enter the country, and, just as importantly, what is the process for bringing these drug traffickers from their homes to face justice in United States courts? 

            The international dimension of 959 cases makes them particularly worthwhile endeavors.  By looking internationally, EDTX can focus on the investigation and prosecution of the leadership class of these drug trafficking organizations, who invariably reside overseas.  When drugs are seized in a routine domestic narcotics investigation, those drugs have already been paid for, and that purchase money is either in the hands of the cartel, or on its way.   However, by interdicting drug shipments before they make landfall in the U.S., we can stop this addictive poison from ever infecting our communities, and we can disrupt a lucrative drug transaction from ever taking place.   This has a ripple effect on other related criminal activity, which is often financed by narco-dollars.  All of us, for example, have heard how drug cartels are expanding into human smuggling, including the smuggling of children, through our southern border.  By depriving cartels and other criminal organizations of drug proceeds, we help prevent other criminal activity—including financial crimes, public corruption, even terrorism—from ever taking root.

            The fact of the matter is that most of the illicit drugs consumed in the United States originate in Central and South America.  Mexico is the primary supplier of heroin and a major source of methamphetamine smuggled into this country. Similarly, Colombia is the leading producer of cocaine for the United States market.  Even illicit drugs manufactured in other parts of the world are smuggled into the United States through many of these same countries via established drug routes. For example, according to the Drug Enforcement Administration, precursor chemicals used in the production of illicit fentanyl often originate in China, but typically enter the United States through our southern border with Mexico.

            Recognizing this threat, as well as the need to attack the drug problem at its source, the United States has enacted “long-arm” statutes.  In the civil context, long-arm statutes apply to a particular state or entity’s ability to exercise jurisdiction beyond its borders.  In the criminal context, the idea is somewhat similar, insofar as these laws allow for the prosecution of individuals by the American justice system for narcotics crimes that occurred entirely in other countries.  These statutes fall into two primary classes.  First, there are narcotics trafficking and conspiracy statutes which are focused on the importation of narcotics into the United States.  Second, the United States has maritime statutes which are based on the centuries old concept of the “Law of the Sea,” providing law enforcement with statutory authority for interdiction on the high seas.  The Eastern District makes vigorous use of both in its international practice.  Allow me to elaborate on both.

               21 United States Code Section 959 is a criminal statute intended to reach violations committed outside of the United States.  Critically, no act needs to actually occur in the United States.  It makes it a crime for a defendant to manufacture or distribute a Schedule 1 or Schedule 2 controlled substance (drugs like cocaine, methamphetamine, marijuana, fentanyl, heroin, and the like), intending that the drug be imported into the United States, knowing that the drug will be imported into the United States, or even having reasonable cause to believe that the drug will be imported into the United States.  Similarly, Title 21 United States Code Section 963 makes it a crime to conspire to commit a violation of Section 959.  Here, the agreement to commit the unlawful act is the crime.  No overt act ever has to occur, simply an agreement.  Collectively, these two statutes give law enforcement a powerful set of tools to disrupt traffickers on their home turf.       

            The power and effectiveness of these long-arm statutes, however, is most evident when reviewing what we don’t have to prove.  The United States does not have to prove that

            (1)  The suspect ever entered the United States;

            (2)  That any criminal act occurred in the United States;

            (3)  That any drugs were actually successfully imported into the United States;

            (4)  That the suspect knew the buyers or the specific destination for the drugs in the United      States; or that

            (5)  The suspect actually physically delivered or distributed the drugs.

            So, against that statutory backdrop, what exactly are we looking for as we investigate and prosecute these international cases?  In other words, how do we prove our case?  Chiefly, we rely on three key pieces of evidence.

            First, we often rely on judicially authorized wiretap evidence.  These are typically wiretaps that are authorized and conducted in foreign countries and shared with us as a part of Mutual Legal Assistance Treaties (otherwise known as MLATs).  In certain limited circumstances, we can intercept communications here in the United States even when the communication occurs entirely outside of our borders because some wireless carriers route all conversations (wherever they might occur) through servers in the United States.  Naturally, this is some of our best evidence because it captures drug negotiations, delivery and payment coordination, and other logistical discussion.  And in situations where law enforcement has already interdicted or seized a drug shipment, targets may even openly speak about previous drug seizures—which is sort of the holy grail of establishing relevant conduct.

            Second, we also rely on “locally sourced” evidence, that is money, drugs, and other contraband seized in foreign countries, and shared with us in the MLAT process.

            Finally, cooperating witnesses are a critical aspect of these cases, just as they are in all of our cases.

            To put a finer point on it, though, how do we prove that a suspect knew, or had reasonable cause to believe, that drugs seized in Colombia, Guatemala, Mexico or elsewhere were destined for the United States? 

            The first indicator is quantity.  In 959 cases we’re dealing with importation-size quantities, amounts measured in thousands of kilograms—quite literally tons—of illicit narcotics.  Long experience tells us that drugs seized in this amount are not intended for distribution on the streets of Bogota or Mexico City, rather these drugs are unfortunately headed for the number one illegal drug-consuming country in the world, the United States.  Just as the hypothetical seizure of ten kilograms of cocaine in a stash house tells the reasonable person that the drugs are intended for distribution as opposed to personal use, the extreme quantities seen in 959 cases is proof of the intended export of the narcotics

            Second, experience with prior investigations has demonstrated that traffickers utilize known drugs routes.  When drugs are seized leaving the eastern Pacific side of Colombia or the Western Caribbean, those drugs are headed north through Guatemala, Honduras, and Mexico, with an eventual destination of the United States.

            Third, another key piece of evidence demonstrating that a given conspiracy is importing drugs into the United States is the seizure of U.S. currency from traffickers abroad.  It is not at all uncommon to find that bulk cash seized in Central or South America is actually United States currency, itself the proceeds of prior drug loads. 

            Fourth, drug traffickers, like legitimate businessmen, frequently use logos or brands to help advertise and identify their products.  When bricks of cocaine are produced and packaged at laboratories in Colombia, they are embossed with logos such as a scorpion, a Texas longhorn, or even the name of the cartel itself—something to signify to the buyer that the packaged drug is of a level of quality that they can trust, as well as a warning to would-be thieves.  When kilograms of cocaine are seized in New York, Chicago, Seattle, or right here in Dallas, we can frequently link those bricks to known drug lords and their laboratories through the logos they display.

            Lastly, but not least, wire intercepts and cooperating witnesses frequently explicitly discuss the intended destination of the drugs.        

            Let me know turn to EDTX’s maritime interdiction efforts.  Under the nation’s maritime laws, found in Title 46 of the United States Code, there is no need to prove that a group of defendants intended to import a load of narcotics into the United States.  Rather, EDTX only needs to prove that the United States has jurisdiction over the vessel itself.  Under the laws of the high seas, as codified in Title 46, a sovereign nation has jurisdiction over any vessel on the high seas that is either stateless (meaning it is not flying the flag of any country); or where the flag country consents (in the case of a vessel that is flying a flag).

            The Eastern District of Texas coordinates closely with the United States Coast Guard—who have been incredible partners—in order to prosecute many cases involving of these types of seizures.  In fact, just last month, we accepted two of these type of seizures for prosecution in our district, one with 1.8 tons of cocaine and another with 4.2 tons of cocaine.  Collectively, that is six tons of cocaine that will never reach American towns, and that’s several million dollars that will never reach the wallets of the cartel.

            Allow me to provide an example from an already resolved case.  A few years ago, a group of Colombian drug traffickers that were targeted by EDTX had arranged to transfer over one ton of cocaine to a vessel which was floating several hundred miles off of the west coast of the Galapagos Islands.  When the United States Coast Guard approached the ship, they discovered that it was a Chinese fishing vessel.  The Chinese government, in the first known case of its kind, consented to the United States taking jurisdiction over the vessel and its crew.  The crew members were subsequently prosecuted in the Sherman Division of the Eastern District and all defendants were convicted.

            The Eastern District has aggressively utilized both prosecutorial tools – importation statutes and maritime jurisdiction – doing so with great success.  For Fiscal Year 2020, in regard to organizational drug cases, otherwise known as OCDETF, the Eastern District was number one in the country for the number of defendants prosecuted, beating out much larger (and more famous) districts like SDNY, the Southern District of Florida, and the Central District of California.  So, when you think drug prosecution, instead of thinking New York, Miami, and Los Angeles, I urge to think Plano, Sherman, and Tyler.  EDTX also led the nation in the number of defendants in opioid and fentanyl prosecutions, as well the number of these organizational defendants involved in financial crimes.  And the Eastern District was number two in the country for the number of indictments against leadership-level defendants in these organizational cases.  And these numbers are driven to a large extent by our office’s relentless pursuit of overseas traffickers, made possible through our valuable 959 partnerships.  

            In discussing these cases, and 959 practice generally, one question inevitably comes up:  Why the Eastern District of Texas?  Why does the Eastern District of Texas prosecute so many of the world’s largest drug traffickers?”  I think the subtext there is “why does such a small district, particularly one without the major population centers seen in other districts, account for such a large share of international defendants?”  The answer is two-fold.

            In the late 1970’s the Eastern District of Texas undertook the investigation and prosecution of one of the richest and most powerful men in Texas, Rex Cauble.  Cauble was larger-than-life.  He owned a chain of western wear stores, a fleet of shrimp boats, ranches, and even a bank.  He was worth $100 million or more. He was known, too, as an anti-drug crusader who recorded his own anti-drug commercials. All the while, however, he was using his fleet of shrimp boats and his private jets to transport over $70 million worth of marijuana from Colombia directly into Texas.  The Eastern District prosecuted him and his entire organization, making national headlines.  This case and other cases led to the establishment of long and lasting relationships with agents and officials in Colombia and throughout Central and South America.  These relationships, in turn, led to joint efforts over the decades to prosecute the highest-level drug traffickers in the courts of the Eastern District.         

            Which leads me to my second point.  In East Texas, we have great judges who are both fair-minded and serious about enforcing the law.  I honestly cannot sing their praises high enough.  They are thorough, prepared, and well-versed in the law.  Furthermore, we have fair but tough juries who are no-nonsense when they evaluate these cases.  Moreover, years of positive experiences and great case results have shown our federal law enforcement partners, as well as our allies in Colombia and other countries, that EDTX can be counted upon to be aggressive and engaged, and to share the same passion for stomping out the drug trade that they do.

            Let me now speak a little bit about the mechanics of how we get defendants here.  The short answer is through the herculean efforts of the United States Marshals Service.  The work that U.S. Marshal John Garrison and his team do to get extradited defendants to the United States is nothing short of extraordinary.

            The longer answer, however, is that extradition is a matter of sovereign discretion.  Both treaties and actual practices can differ widely among countries.  The required paperwork to extradite defendants from another country may vary from 40 or 50 pages—to literally volumes, or even boxes, of papers.  Similarly, extradition proceedings in the foreign country can take anywhere from a few months to a few years, depending on the provisions of the respective treaty.  Most countries afford a hearing in a judicial setting, but again, the specifics of the hearing will vary from country to country.  Additionally, most countries afford a defendant at least one level of judicial review, as well as a final decision by one or more executive authorities.  Obviously, these proceedings will extend the length of the extradition process.

            The bulk of our cases come from Colombia and Guatemala.  This reflects the reality that Colombia is a major source country for cocaine and heroin, and that Guatemala is the critical waypoint, for reasons of geography, that nearly all loads of narcotics have to pass through on the way to the United States. Mexico is, of course, also a major transit point but it is much more difficult to accomplish extraditions from Mexico, often taking several years, sometimes even up to a decade.

            Since 2017, the Eastern District has extradited a total of 92 individuals from Colombia, 11 from Guatemala, and ten from Mexico.  There are many more suspects pending arrest in those countries, and even more than that, if one were to include requests to extradite that are currently pending before the State Department.  I know these numbers might not mean much when cited in the abstract, but, let me just say, that’s a lot.  In fact, one—just one—of our AUSAs in the Plano office is responsible for 70 percent of all of Guatemala’s extraditions.  By all accounts, the demand for extradition is only increasing, and EDTX, as part of its commitment to its 959 practice and partnerships, is scaling up in staffing and resources to meet the need.

            So, once we have properly investigated the case and our grand jury has handed up an indictment there are four key steps to the process of getting the defendant to the United States.    First, we work with our foreign partners to locate the fugitive.  This can often be one of the more difficult steps.  Second, we submit a formal request asking the foreign jurisdiction to issue a warrant based on our indictment--this is called a Provisional Arrest Warrant (or PAW) because it is conditioned on our promise to follow up with a formal extradition request once the fugitive is arrested.  Third, the foreign authorities obtain the requested warrant and arrest our defendant.  The defendant then waits in jail while we have a short deadline to have our State Department make a formal extradition request to the foreign ministry of the other nation.  Finally, if the formal extradition request is approved, the defendant is transported to the United States, courtesy of the United States Marshals Service.  This process can take as little as 30 days and, again, as much as a decade.  In our experience, it usually takes around nine months for a extradition from Colombia and several years for one from Mexico.

            Having explained the background of how we get our international cases, I would now, if you will indulge me, love to tell you about some of the exciting successes that we have had in the last year or two.

            I don’t know if we have any Netflix fans here, but if we do, you may have heard of a series called “Somos.”  It is a difficult-to-watch series that chronicles the events that led up to a massacre in a small village in Mexico called Allende by the Los Zetas cartel.  The Zetas were notorious for their brutality, even by cartel standards.  The Zetas ruthlessly carried out beheadings, hangings, torture, kidnappings, and even boiling or burning people alive, in order to intimidate and demoralize enemies and innocent civilians.

            In September of this year, after seven years of extradition efforts, one of the men most responsible for these murders was sentenced to life imprisonment in the Eastern District of Texas. Numerous witnesses described how Hugo Cesar Roman-Chavarria, also known as “El Vecino,” participated in the massacre by traveling around Allende with Zetas gunmen, pointing out the homes of relatives and associates of a person they suspected was providing information to law enforcement, marking these people and their families for death.  Zetas gunmen went door-to-door throughout the village, killing men, women, and children, decimating the town.  After the Zetas finished their mass murder, they loaded the bodies into a barn and incinerated the building.  A definitive conclusion has never been reached as to the number of men, women, and children who lost their lives, but the total is believed to be at least 100, and possibly up to 300.

            Over the course of a three-day sentencing hearing in August and September of this year the district court heard from 13 witnesses for the government, including other high-ranking Zetas members, who, like Chavarria, had been extradited to the United States to face charges.  These witnesses described not only Chavarria’s willing involvement in this massacre, but also described his role as a major player in the drug importation trade, overseeing the shipment of enormous quantities of cocaine between Piedras Negras, Mexico, and Eagle Pass, Texas on behalf of the Los Zetas cartel.  In the end, Chavarria received a well-deserved life sentence, and hopefully some justice and peace was delivered to the families and friends of those who were killed in Allende.

            Similarly, just last month, one of the largest and most violent drug traffickers in Guatemala, Wilson Luargas-Garcia, was also sentenced to a term of life imprisonment.  Luargas-Garcia was a prolific drug trafficker, responsible for the trafficking of large amounts of cocaine to drug cartels and guerrilla fighters in Central and South America.  He coordinated shipments with the Revolutionary Armed Forces of Colombia (also known as the FARC), one of Colombia’s largest and most violent rebel groups. Luargas-Garcia, who had a reputation for employing violence against his rivals, used illicit proceeds from his drug sales to acquire weapons and to train his personal paramilitary security guards.  In April 2018, Luargas-Garcia was extradited to the Eastern District of Texas to face drug charges.  Despite being in custody, he continued to run his drug trafficking organization from various local jails, using fellow inmates to smuggle cell phones and other contraband into the jail facilities.  Federal investigators teamed with the Smith County Sheriff’s Office and the Guatemalan Ministerio Público to uncover these activities and dismantle his drug operation.  In retaliation, Luargas-Garcia threatened to kill one of our Eastern District federal prosecutors.  Like Chavarria, Luargas Garcia also received a well-deserved life sentence.

            One more colorful defendant was Jhon Eduis Viafara Mina, also known as “Futbolista,” “Goleador,” and “Makelele.”  Viafara was involved in the logistical preparations of dispatching large cocaine shipments by aircraft or boat from Colombia to Mexico via Central America, with an eventual destination of the United States.  Based on this conduct, Viafara was indicted, extradited, and eventually sentenced to 11 years for his involvement in narcotics trafficking.  One fun fact is that Viafara Mina was once a star soccer player in Europe, playing for teams in Great Britain and Spain and, notably, the Colombia National Team.  Despite all of this, the lure of even greater riches brought him into narcotics trafficking.  In the end, it only brought him a lengthy prison sentence.         

            In closing, I wish to make one obvious, but crucial point.  We could not bring these cases without the tremendous partnerships that we enjoy with our federal, state, local, and international partners.  For those agents and officers in attendance, let me say that EDTX is tremendously grateful for your hard work, your dedication, and your commitment to the rule of law.  You make a real difference in the lives of Americans, as well in the lives of those who live in countries where the fight against drug cartels is a matter of literal life and death.  EDTX will continue to be your partner and your ally as we continue this noble pursuit.  Let us, together, bring this fight to the cartels’ front door.

            Thank you again for the invitation to come and address you today.  I truly appreciate the contribution that the North Texas Crime Commission makes to keeping public safety at the forefront of the public conversation.  Thank you for what you do.”

The North Texas Crime Commission (formerly the Greater Dallas Crime Commission) was established in 1950.  Its belief is that proper enforcement and enlightened prevention can be achieved through a comprehensive and cooperative effort involving concerned citizens and law enforcement.  In addition to monthly membership breakfasts, the NTCC travels to Austin monthly during the Legislative Session to meet with key lawmakers and annually to Washington, D.C. to meet with law enforcement officials and lawmakers.

 

MARSHALL, Texas – A Jefferson man has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas Ganjei today.

Beau Daniel Merryman, 20, pleaded guilty to distribution of information relating to explosives and destructive devices today before U.S. Magistrate Judge Roy S. Payne.

According to information presented in court, between September and October 2019, Merryman engaged in a series of online conversations with covert FBI employees.  During those conversations, Merryman provided detailed instructions on how to make multiple types of improvised explosive devices (IEDs), such as pipe bombs and pressure-cooker bombs.  Merryman explained how to construct the IEDs, select explosives, pack shrapnel for maximum damage, and construct fuses or detonating devices.  Merryman also directed that the IEDs be used to target federal law enforcement and critical infrastructure, such as electrical substations.

“This defendant had the knowledge, intent, and capability to inflict great harm on our East Texas community,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Thanks to the extraordinary investigative work of our agency partners, he was stopped before any lives were lost or damage was done.”

“This defendant believed he was sharing his knowledge and expertise with individuals who would cause significant damage or injury to targets including federal law enforcement and critical infrastructure,” said FBI Dallas Special Agent in Charge Matthew DeSarno. “The FBI is committed to protecting our communities from harm and working with our law enforcement partners to disrupt violent activity. We ask the public to stay vigilant and to continue reporting suspicious or threatening behavior to law enforcement.”

Merryman was indicted by a federal grand jury on Oct. 16, 2019.  He faces up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

This case is being investigated by the Federal Bureau of Investigation Tyler Resident Agency, Bureau of Alcohol Tobacco Firearms and Explosives, Cass County District Attorney's Office, Atlanta Police Department, and Tyler Police Department.  This case is being prosecuted by Assistant U.S. Attorneys Frank Coan and Ryan Locker.

BEAUMONT, Texas – An Indian national residing in Seattle, WA, has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Aakash Gandhi, 28, pleaded guilty to conspiracy to commit mail fraud today before U.S. District Judge Marcia A. Crone.  

According to information presented in court, throughout the month of October 2020, a Beaumont resident received multiple phone calls from an individual—later identified as Gandhi—falsely purporting to be a special agent with the Social Security Administration.  Gandhi demanded the victim send large sums of cash through the mail so they could receive a new social security number and avoid alleged criminal liability.  The elderly Beaumont resident fell victim to the scam and sent more than $20,000 in cash through the mail as requested to a UPS store in Seattle.  Gandhi received those packages in Seattle and forwarded a portion of those funds to his co-conspirators. 

“There can be no doubt that phone scams are not merely a nuisance, but a genuine threat to the financial livelihood of all Americans,” said Acting U.S. Attorney Nicholas J. Ganjei.  “Although phone scams continue to increase in number, EDTX is scaling up through staffing and training to meet and defeat this challenge.”

“Criminals continue to exploit the elderly and vulnerable populations in search of a profit.  HSI is committed to bring these fraudsters to justice and return hard earned money.” said Special Agent in Charge (SAC) Robert Hammer, who oversees HSI operations in the Pacific Northwest.  “This should serve as a reminder that the U.S. Government will never call and ask you to send cash in the mail.”

Gandhi was indicted by a federal grand jury on July 8, 2021.  He faces up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 10am-6pm Eastern Time, Monday-Friday. English, Spanish, and other languages are available. 

The case is being investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Jonathan C. Lee.

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SHERMAN, Texas - A Denton County tax preparer has been sentenced to prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today.

Tendai Gurure, 46, pleaded guilty on May 28, 2021 to aiding and assisting in preparation of false and fraudulent tax returns and was sentenced to 24 months in federal prison today by U.S. District Judge Jeremy Kernodle.  Gurure was additionally ordered to pay restitution in the amount of $2,928,740.10.

According to information presented in court, Gurure owned and operated TaxLinks, a tax return preparation business.  An investigation revealed that Gurure was filing returns that included false Schedule C information, fictitious business losses, and false claims for Earned Income Credits.  A search warrant was executed on Gurure’s business and a subsequent review of seized documents determined that Gurure was responsible for losses to the government totaling $2,928,740.10 for tax years 2015, 2016, and 2017.

“The American public places a tremendous amount of trust in the hands of tax preparers, and the IRS, in turn, trusts these preparers to abide by all laws and file accurate returns,” said Acting U.S. Attorney Nicholas Ganjei. “Fraudulent tax returns are ultimately a theft against the public fisc and a breach of the public trust, and EDTX will do its utmost to protect the integrity of both.”

This case was investigated by the Internal Revenue Service-Criminal Investigation and prosecuted by Assistant U.S. Attorney Kevin McClendon.

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PLANO, Texas – An Irving man has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Ira Morya Davis, 40, pleaded guilty to conspiracy to commit wire fraud before U.S. Magistrate Judge Kimberly Priest Johnson on Oct. 26, 2021.

According to information presented in court, Davis and at least two other co-conspirators devised a fraud scheme targeting various financial institutions and real estate purchasers.  To accomplish the fraud, Davis and his co-conspirators created shell companies and executed various mortgage and property documents that purportedly conveyed ownership interests of various real properties from the true owners to the conspirators’ shell companies.  Davis and his co-conspirators then filed the fraudulent documents with county offices falsely showing that they had mortgage liens on the properties, sold the properties, and triggered the title companies to unwittingly fund the co-conspirators.  During the course of the scheme, Davis obtained and used fraudulent notary stamps using real people’s identities, which enabled the conspirators to legitimatize the otherwise fraudulent documents.  Davis and his co-conspirators targeted multiple properties, and the financial harm resulting from his offense was at least $2.5 million. 

“The Eastern District is committed to tackling complex fraud schemes, including those that target financial institutions and purchasers in the real estate market,” said Acting United States Attorney Nicholas J. Ganjei.  “Regardless of the complexities involved, the public can be assured that EDTX and its law enforcement partners are working tirelessly to disentangle complex white collar fraud schemes and bring culpable individuals to justice.” 

Davis was indicted by a federal grand jury on March 12, 2020.  He faces up to 20 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

The case is being investigated by the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation.

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PLANO, Texas – A Nigerian national has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei.

Sobanke Idris Sunday Adereti, 24, pleaded guilty to false use of a passport and attempted bank fraud today before U.S. Magistrate Judge Kimberly Priest Johnson.

According to information presented in court, Adereti knowingly used a false passport in an attempt to open a bank account for the purpose of furthering fraud schemes and engaging in money mule activity.

“A significant danger of document fraud is that it helps fraudsters move their ill-gotten gains through the US bank system by concealing it in legitimate-looking bank accounts,” said Acting U.S. Attorney Nicholas J. Ganjei, adding, “this not only affects our banks but also the individual victims whose identities were used to open the accounts.  Thanks to astute bank employees and the quick work of law enforcement, this defendant was prevented from further fraud against innocent victims.”

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 10am-6pm Eastern Time, Monday-Friday. English, Spanish, and other languages are available.   

The case was investigated by the Diplomatic Security Service of the U.S. Department of State, the U.S. Secret Service, the U.S. Small Business Administration-Office of Inspector General, and with assistance from the Federal Bureau of Investigation.

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BEAUMONT, Texas – A Beaumont man has pleaded guilty to hurricane-related fraud in the Eastern District of Texas, announced Acting U.S. Attorney Nicholas J. Ganjei today. 

Ricky Gonzales, 61, pleaded guilty to fraud in connection with a major disaster or emergency benefits today before U.S. Magistrate Judge Christine L. Stetson.

According to information presented in court, Hurricane Harvey made landfall in southeast Texas in August 2017, causing extensive damage to the region.  Gonzales applied for assistance from the Federal Emergency Management Agency (FEMA) for damage to a residence in Mauriceville, which he claimed was his primary residence.  Gonzales received approximately $35,000 as a result of his claim.  This residence, however, was actually rented and occupied by Gonzales’ daughter, who also applied for FEMA assistance.  Her application was denied because of the duplicate applications for the same address.  In order to receive FEMA funds, the applicant must use the property as their primary residence.  Rental income properties are not eligible for FEMA funds.   

Gonzales was indicted by a federal grand jury on July 8, 2021.  He faces up to 30 years in federal prison.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

“FEMA relief funds are intended to assist Americans who have been affected by life-changing disasters, not as a publicly-funded handout for unscrupulous fraudsters,” said Acting U.S. Attorney Nicholas J. Ganjei.  “EDTX will protect the integrity of these relief programs, and the interests of the American taxpayer, by vigorously prosecuting anyone who attempts to steal disaster relief funds.”

This case is being investigated by the Department of Homeland Security Office of Inspector General and the Federal Emergency Management Agency and prosecuted by Assistant U.S. Attorney Rachel Grove.  

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